CONFIDENTIAL TREATMENT REQUESTED. Confidential portions of this document
have been redacted and have been separately filed with the Commission.
INTERACTIVE MARKETING AGREEMENT
This Interactive Marketing Agreement (the "Agreement"), dated as of
November 1, 1997 (the "Effective Date"), is between America Online, Inc.
("AOL"), a Delaware corporation, with offices at 00000 XXX Xxx, Xxxxxx, Xxxxxxxx
00000, and XxxxxxxxxXxxxx.xxx Inc. ("B&N"), a Delaware corporation, with offices
at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000. AOL and B&N may be referred to
individually as a "Party" and collectively as "Parties."
INTRODUCTION
AOL and B&N each desires to enter into an interactive marketing
relationship whereby AOL will promote and distribute an interactive site
referred to (and further defined) herein as the Affiliated B&N Site. This
relationship is further described below and is subject to the terms and
conditions set forth in this Agreement. Defined terms used but not defined in
the body of the Agreement will be as defined on Exhibit A attached hereto.
TERMS
1. PROMOTION, DISTRIBUTION AND MARKETING.
1.1. AOL Promotion of Affiliated B&N Site.
As described more fully herein, AOL shall provide B&N with
promotions through the AOL Network for the Affiliated B&N
Site (the "Promotions"). The Promotions shall be generally
in accordance with the Carriage Plan and other materials
attached hereto as Exhibit G, subject to changes therein in
AOL's reasonable editorial discretion which are (i)
consistent with the mutual objectives, intentions and
relationships of the Parties as set forth in this Agreement
and (ii) designed to satisfy the sales and Impression
thresholds and Level requirements set forth in this
Agreement. Specific placements for Promotions will include
an "Anchor Tenant" position within the *** integrated links
to the Affiliated B&N Site from within the ***, and a
placement during at *** of the aggregate Impressions each
*** made on the ***. AOL reserves the right to redesign or
modify the organization, structure, "look and feel,"
navigation, practices and other elements of the AOL Service
at any time, provided that, if such redesign or
modification materially and adversely affects the
effectiveness of the Promotions in selling Products, AOL
will provide the Promotions with comparable promotional
placement to that existing during the Initial Term prior to
such redesign or modification, reasonably satisfactory to
B&N.
1.2. Impressions.
1.2.1. Impressions Commitments. AOL will deliver or cause
to be delivered at least the following annual
Impressions
*** Confidential portions of this document have been redacted and have been
filed separately with the Commission.
for the Promotions (each an "Annual Minimum"): ***
in Year 1, *** in Year 2, *** in Year 3 and *** in
Year 4.
In addition, for each Year during the Initial
Term, AOL shall deliver or cause to be delivered
to B&N an additional *** in Level A, *** in Level
B and *** in Level C (as such Levels are defined
below). The placements for such additional
Impressions within such Levels shall be as
determined by AOL in its reasonable editorial
discretion. B&N shall notify AOL prior to the
beginning of each Year (except in the case of Year
1, promptly after the date of execution of this
Agreement) of its election as to whether to use
such Impressions during such Year ***, provided
that any change in election from the prior Year's
election shall be subject to AOL's approval in its
sole discretion. The Promotions associated with
such Impressions shall link directly to ***
associated with the Affiliated B&N Site.
Notwithstanding the foregoing, AOL shall have the
right before any Year (other than Year 1) to buy
out B&N's remaining rights to such additional
Impressions by ***.
1.2.2. Distribution. The Annual Minimums for each Year
will be delivered across inventory Levels A, B and
C (as defined, and collectively, the "Levels"). In
Year 1, AOL will deliver no less than *** of each
Annual Minimum in Level A, approximately *** of
each Annual Minimum in Level B, and no more than
*** of each Annual Minimum in Level C. In each of
Year 2, Year 3 and Year 4, AOL will deliver no
less than *** of each Annual Minimum in Level A,
approximately *** of each Annual Minimum in Level
B, and no more than *** of each Annual Minimum in
Level C. AOL will use reasonable efforts to
accommodate B&N's requests to re-allocate the
Impressions distribution among the Levels (subject
to availability), provided that the Parties can
mutually agree upon a formula for adjusting the
aggregate Impressions commitments and thresholds
described in this Agreement based on the relative
value of the Impressions being re-allocated. AOL
will use reasonable efforts to deliver at least
*** of each Annual Minimum within *** year
(excluding the *** of 1997) and at least *** of
each Annual Minimum between November 1 and
Christmas Day of each calendar year (excluding
such period of 1997), in each case across Levels
substantially in accordance with the percentages
set forth above. Unless B&N agrees otherwise, not
more than *** of Impressions in Year 1 will be
***. In any other Year, the Parties will mutually
agree in good faith on the maximum percentage of
listbox Impressions based upon the relative Book-
selling performance of such listbox Impressions.
AOL, in its discretion, may provide Promotions
with Impressions on the *** or Impressions of
similar quality to the *** as of the date hereof
as determined by AOL in its reasonable discretion
***. If in Year 1, Transaction Revenues for such
Year do not equal or exceed *** and B&N is not
then in breach under this Agreement, then AOL
shall provide Promotions with at ***
*** Confidential portions of this document have been redacted and have been
filed separately with the Commission.
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in Year 2. If in Year 2, Transaction Revenues for
such Year do not equal or exceed *** and B&N is
not then in breach under this Agreement, then AOL
shall provide Promotions with at least *** in Year
3. If in Year 3, Transaction Revenues for such
Year do not equal or exceed *** and B&N is not
then in breach under this Agreement, then AOL
shall provide Promotions with at least *** during
Year 4. All *** Impressions shall be deemed bonus
Impressions and shall not be applied toward the
Annual Minimums. (Notwithstanding the foregoing,
AOL is not guaranteeing that the Affiliated B&N
Site will achieve any specific level of
Transaction Revenues and AOL will not be in breach
of this Agreement solely based upon the failure of
the Affiliated B&N Site to achieve any specific
level of Transaction Revenues.)
1.2.3. Windfalls. AOL will not be obligated to provide in
excess of the Annual Minimum for the applicable
Year. If AOL exceeds an Annual Minimum by more
than *** in the applicable Year (e.g., by more
than *** in Year 1), the excess Impressions above
such Annual Minimum (the "Excess") will serve to
reduce the subsequent Year's Annual Minimum by an
amount equal to the Excess, subject to an
aggregate reduction of no greater than *** of the
prior Year's Annual Minimum.
1.2.4. Shortfalls. AOL will, in good faith, attempt to
fulfill each Year's Annual Minimum; provided that
a shortfall in Impressions at the end of a Year (a
"Shortfall") will not be deemed a breach of the
Agreement by AOL unless such shortfall results
from the bad faith or willful misconduct of AOL.
Any Shortfall will be added to the Annual Minimum
for the subsequent Year. In the event there is a
Shortfall in Impressions as of the end of the
Initial Term (a "Final Shortfall"), AOL will
provide B&N (for its use) with advertising which
has a total value, *** discounted by ***, equal to
the value of the Final Shortfall (determined by
multiplying the percentage of Impressions that
were not delivered by the total, guaranteed
payment provided for below, and taking into
consideration the relative value of the
Impressions included in such Final Shortfall).
Such advertising shall be delivered to B&N on the
AOL Network within a reasonable period of time
following the Initial Term.
1.2.5. Satisfaction. AOL will not be required to deliver
or cause to be delivered in excess of *** (the
"Aggregate Threshold"). The Annual Minimum for a
given Year will be deemed to be satisfied in the
event gross Site Revenues for such Year *** (in
the case of Year 1), *** (in the case of Year 2),
*** (in the case of Year 3) and *** (in the case
of Year 4). All Impressions commitments hereunder
(including, without limitation, any shortfall
remedies, but not including placement commitments)
will be deemed to be satisfied at any such time as
gross Site Revenues ***.
*** Confidential portions of this document have been redacted and have been
filed separately with the Commission.
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1.3. Promotions. The specific B&N Content to be contained within
the Promotions (including, without limitation, advertising
banners and contextual promotions) (the "Promo Content")
will be determined by B&N, subject to ***. B&N will
consistently and meaningfully update the Promo Content to
be contained within the Promotions on a no-less-than ***.
The Parties shall jointly consult from time to time
regarding the Promo Content to ensure that it is designed
to maximize performance. Except to the extent expressly
described herein, including without limitation as provided
in Section 1.1, the specific form, placement, duration and
timing of the Promotions will be as determined by AOL in
its reasonable editorial discretion. The Parties
acknowledge that the pages on the AOL Network *** and,
accordingly, ***. In the event for any reason any pages on
the AOL Network ***, B&N Promotions *** without B&N's prior
written approval, which will not be unreasonably withheld
or delayed taking into consideration (i) AOL's
demonstration of its ability to reliably track Impressions
*** and (ii) the comparable effectiveness of such ***, in
each case as demonstrated by test results reasonably
acceptable to B&N. In addition, upon B&N's request from
time to time ***, where possible, prior to a proposed
B&N-sponsored event (e.g., author chats), AOL shall provide
B&N with an ***, subject to AOL approval of ***, which
shall not be unreasonably withheld or delayed (taking into
consideration AOL's reasonable assessment of the *** which
a proposed *** will ***). AOL shall also supply *** to
allow B&N to sell Books to ***. B&N and AOL shall cooperate
to promote such *** events on the AOL Service (including
through ***). In connection with any such event, in
addition to the aforementioned notice requirement, B&N will
comply with AOL's other standard requirements related to
booking and implementation of ***.
1.4. B&N Promotion of Affiliated B&N Site and AOL. B&N will
promote the AOL Service and the availability of the
Affiliated B&N Site as set forth in Exhibit B.
1.5. Monthly Review. Within thirty (30) days (or such lesser
period as monthly reports are generally provided to AOL's
other significant commerce partners) after the end of each
calendar month during the Term, AOL will provide B&N with a
review of performance of the Promotions for such month,
which will include standard AOL reporting with respect to
Impressions and available "click-through" information,
demographic and usage information generally made available
by AOL to its significant commerce partners, and other
information reasonably requested by B&N.
2. AFFILIATED B&N SITE.
2.1. Content. B&N will market and sell through the Affiliated
B&N Site a comprehensive offering of Books. Subject to the
restrictions set forth below in this Section 2.1 and the
other terms and conditions of this Agreement, B&N may also
market and sell through the Affiliated B&N Site (i) the
following other products *** and (ii) ***. B&N will review,
delete, edit, create, update and otherwise manage all
Content available on or through the Affiliated B&N Site
which it controls in accordance with the terms of this
Agreement. B&N will ensure that the Affiliated B&N Site
does not in any respect promote, advertise or
*** Confidential portions of this document have been redacted and have been
filed separately with the Commission.
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market any Interactive Service. Except as otherwise set
forth in this Agreement or agreed to by AOL, neither the
Promotions nor any pages on the Affiliated B&N Site
directly linked to the Promotions ("Linked Pages") will
contain promotions, links, sponsorships or other Content
(a) relating to any Products other than Books or (b)
otherwise in conflict with AOL's standard advertising
policies. On any pages within the Affiliated B&N Site
directly linked to the Linked Pages, Content relating to
any Products other than Books will be ***. Subject to the
last sentence of Section 3.3, the Affiliated B&N Site will
not contain any material, non-Book-related, third party
Content components (e.g. an aggregated offering of
sports-related links), except as otherwise mutually agreed
upon by the Parties. Nothing in this Section 2.1 is
intended to restrict B&N from selling *** on the Affiliated
B&N Site or the Linked Pages, except for products which AOL
has notified B&N in writing are restricted as a result of
written agreements entered into by AOL with third party
retailers of such products (subject to the last sentence of
Section 3.3).
2.2. Production Work. Except as agreed to in writing by the
Parties pursuant to the "Production Work" section of the
Standard Legal Terms & Conditions attached hereto as
Exhibit E, B&N will be responsible for all production work
associated with the Affiliated B&N Site, including all
related costs and expenses.
2.3. Hosting; Communications. B&N will be responsible for all
communications, hosting and connectivity costs and expenses
associated with the Affiliated B&N Site. In addition, B&N
shall provide all computer, telephone and other equipment
or resources necessary for B&N to access the AOL Service.
B&N will create a mirrored version of the Affiliated B&N
Site in order to comply with the terms of this Agreement.
B&N will bear responsibility for the cost of such mirrored
site, which site will be hosted by AOL provided that (i)
AOL's hosting price and terms are reasonably competitive in
all material respects with others in the industry and (ii)
the quality of service supplied by AOL is reasonably
satisfactory to B&N. B&N will utilize a dedicated high
speed connection to maintain quick and reliable transport
of information to and from the B&N data center and AOL's
designated data center.
2.4. Technology. B&N shall take all commercially reasonable
steps necessary to conform its promotion and sale of
Products through the Affiliated B&N Site to the
then-existing technologies identified by AOL which are
optimized for the AOL Service. AOL shall be entitled to
require reasonable changes to the Content (including,
without limitation, the features or functionality) within
any Linked Pages to the extent such Content will, in AOL's
good faith judgment, adversely affect any technical aspect
of the AOL Service. AOL reserves the right to review and
test the Affiliated B&N Site from time to time to determine
whether the site is compatible with AOL's then-available
client and host software and the AOL Service.
2.5. Product Offering. B&N will use *** to ensure that the
Affiliated B&N Site includes all of the Products and other
Content (including, without limitation, any features,
offers, contests,
*** Confidential portions of this document have been redacted and have been
filed separately with the Commission.
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functionality or technology) that are then made available
by or on behalf of B&N through any Additional B&N Channel;
provided, however, that: (a) such inclusion will not be
required where it is commercially or technically
impractical to either Party (i.e., inclusion would cause
either Party to incur substantial incremental costs); (b)
any non-Book-related Product offerings which would
otherwise be required by such inclusion remain subject to
Section 2.1 and the other terms of this Agreement; and (c)
certain limited special promotions for third parties may be
omitted, provided that comparable promotions are offered on
the Affiliated B&N Site pursuant to Section 2.8.
2.6. Special Features/Collections. B&N will, upon AOL's
reasonable request, create for offering on the Affiliated
B&N Site (within thirty (30) days of such request) and
manage specific, co-branded (i) topical collections of
books (including an "AOL Books" collection) and (ii)
topical search features, each to be linked to corresponding
portions of the AOL Service.
2.7. Pricing and Terms. B&N will use commercially reasonable
efforts to ensure that: (a) the prices (and any other
required consideration) for Products in the Affiliated B&N
Site ***; (b) the terms and conditions related to Products
in the Affiliated B&N Site are ***; and (c) both the prices
and the terms and conditions related to Products in the
Affiliated B&N Site are ***.
2.8. Special Offers. B&N will promote through the Affiliated B&N
Site on a regular and consistent basis special offers
exclusively available to AOL Members, e.g., price
discounts, shipping specials, etc. (the "Special Offers").
B&N will provide AOL with reasonable prior notice of
Special Offers so that AOL can market the availability of
such Special Offers in the manner AOL deems appropriate in
its editorial discretion, subject to the terms and
conditions hereof.
2.9. Operating Standards. B&N will ensure that the Affiliated
B&N Site complies at all times with the standards set forth
in Exhibit C. To the extent site standards are not
established in Exhibit C with respect to any aspect or
portion of the Affiliated B&N Site (or the Products or
other Content contained therein), B&N will provide such
aspect or portion at a level of accuracy, quality,
completeness, and timeliness which substantially meets or
exceeds prevailing standards in the online book retailing
industry. The sale by B&N of electronically delivered Books
through the Affiliated B&N Site shall be subject to
capacity and technical limitations, and downloading fees
and related expenses, reasonably imposed or incurred by
AOL.
2.10. Traffic Flow. Except as otherwise approved by AOL, B&N will
take commercially reasonable efforts to ensure that AOL
traffic is either kept within the Affiliated B&N Site or
channeled back into the AOL Service (with the exception of
advertising links sold and implemented pursuant to the
Agreement). The Parties will work together on implementing
mutually acceptable links back from the Affiliated B&N Site
to the AOL Service.
*** Confidential portions of this document have been redacted and have been
filed separately with the Commission.
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2.11. Marketing to AOL Purchasers. To the extent B&N sends any
form of communications to persons who were reasonably
ascertainable by B&N to be AOL Purchasers, B&N will promote
the Affiliated B&N Site as the location at which to
purchase Products (as compared to any more general or other
site or location).
3. AOL EXCLUSIVITY AND RELATED OBLIGATIONS.
3.1. AOL Service. B&N will be the exclusive marketer of the
Exclusive Service within *** during the Initial Term ***.
3.2. Greenhouse/DCI/International. B&N will be the exclusive
marketer of the Exclusive Service through ***. B&N will be
the exclusive National Book Retailer promoted by ***
(excluding brand advertising for local, physical retail
locations (other than locations operated by a National Book
Retailer) promoted through a corresponding ***). Through
the ***, B&N will be the exclusive *** and operated
National Book Retailer promoted ***. Collectively, these
restrictions are referred to herein as the "Ancillary
Exclusivities" (and, with the AOL Service Exclusivity, the
"Combined Exclusivities").
3.3. Third Party Limitations. To the extent a third party would
be affected by the foregoing exclusivity (a "Restricted
Party") and such party is not solely a provider of the
Exclusive Service (i.e., it is also engaged in activities
other than Book-selling), such exclusivity shall only apply
to the marketing of the Exclusive Service by such
Restricted Party; provided that the foregoing exception
shall apply *** in the case of a National Book Retailer
identified on Exhibit F (including affiliates promoted in
any way under the same brand name marketing any of the
Products referred to in Section 2.1(i) ("Related
Products")) (each an "Identified National Book Retailer"),
provided that the restrictions in this Section 3.3 will not
be violated if (i) AOL enters into an agreement with
respect to Related Products with any third party not then
an Identified National Book Retailer, (ii) such third party
thereafter becomes an Identified National Book Retailer by
way of merger, acquisition or otherwise, and (iii) AOL was
not aware of such contemplated transaction at the time it
entered into the Related Product agreement with such third
party. AOL shall not online, through the AOL Service, in
any respect (i) prior to the end of Year 2, promote,
advertise, market or distribute (including by way of direct
links) *** any Identified National Book Retailer, or (ii)
during the Initial Term, promote, advertise, market or
distribute (including by way of direct links) *** any
Identified National Book Retailer. In addition, AOL shall
use commercially reasonable efforts, in entering into
agreements after the date of execution of this Agreement
*** to restrict the ability of such parties to online
promote, advertise (excluding banner or similar
advertising), market or distribute (including by way of
direct links) the products of, any Identified National Book
Retailer through such *** appearing (a) *** or (b) through
its affiliated site linked directly to the ***, as the case
may be. To the extent AOL enters into any Significant
Agreement which does not contain the foregoing restriction,
then the restrictions imposed on B&N *** of this Agreement
shall be deemed modified to be only as restrictive on a
comparable basis *** as the restrictions
*** Confidential portions of this document have been redacted and have been
filed separately with the Commission.
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actually imposed by AOL on the other party to such
Significant Agreement. AOL shall notify B&N promptly of its
entering into any Significant Agreement which would require
the modification to Section 2.1 described in the previous
sentence.
3.4. Exceptions. Notwithstanding anything to the contrary in
this Section, no provision of this Agreement will limit
relationships between AOL and/or the Additional Parties and
any third parties, relating to: (i) the promotion,
advertising or sale (collectively, "Promotion") of Books
through an auction or club format by or for any entity
other than an Identified National Book Retailer; (ii) the
Promotion of "audio books"/"books on tape" by or for any
entity other than an Identified National Book Retailer;
(iii) the Promotion of Books by or for any entity other
than an Identified National Book Retailer for whom such
sales do not constitute at least 10% of annual revenues;
(iv) the Promotion of used Books other than used college
textbooks (subject to the exception described below) by or
for any entity other than an Identified National Book
Retailer; (v) publisher Content regarding or promoting
specific Books (other than Books generally) published by
such publisher, unless expressly promoting an Identified
National Book Retailer; (vi) brand advertising solely
promoting physical retail locations for any entity other
than an Identified National Book Retailer; and (vii) AOL
commitments existing prior to the Effective Date, of which
the only material commitment is the Agreement dated June
30, 1997 (the "CUC Agreement) between AOL and CUC
International, Inc. ("CUC") which provides for the ***;
provided that the restrictions in this Section 3.4 related
to Identified National Book Retailers will not be violated
if (x) AOL enters into an agreement with any third party
not then an Identified National Book Retailer which, if
such party were an Identified National Book Retailer, would
not be permitted under this Section 3.4, (y) such third
party thereafter becomes an Identified National Book
Retailer by way of merger, acquisition or otherwise, and
(z) AOL was not aware of such contemplated transaction at
the time it entered into the agreement with such third
party. One year from the time B&N reasonably demonstrates
to AOL that B&N is one of the top three sellers of used
Books with respect to gross sales revenue and scope of
offering, *** will be deemed to also cover third parties
marketing a competitive offering of used Books. B&N
acknowledges that, notwithstanding this Section 3.4, ***.
3.5. Additional Provisions Regarding Greenhouse Properties, DCI
Areas and International Services. AOL shall acquire from
*** for the benefit of B&N, without payment of any
consideration in addition to the amounts payable by B&N
under Sections 4.1 and 4.2, the rights and commitments set
forth in this Agreement relating to such entities. In the
event that the sale, transfer or other disposition to an
unaffiliated third party of any of the Greenhouse
Properties results in a material decrease in the
Impressions being delivered through the Greenhouse
Properties, AOL shall deliver or cause to be delivered to
B&N comparable substitute Impressions through replacement
properties. In addition, AOL shall use commercially
reasonable efforts ***, and B&N acknowledges that it may be
required to pay additional compensation in connection
therewith. In the event such additional amounts would be
payable by B&N, B&N shall be entitled
*** Confidential portions of this document have been redacted and have been
filed separately with the Commission.
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to elect to forego adding such additional international
service to the International Services.
4. PAYMENTS.
4.1. Guaranteed Payments. B&N will pay AOL a guaranteed amount
of *** as follows: (a) *** upon the execution of this
Agreement, *** by February 1, 1998 and *** by each of May
1, 1998 and September 1, 1998; (b) *** by each of January
1, 1999, April 1, 1999, July 1, 1999 and October 1, 1999;
and (c) *** by each of February 1, 2000, May 1, 2000,
August 1, 2000, November 1, 2000, February 1, 2001, May 1,
2001, August 1, 2001 and November 1, 2001.
4.2. Sharing of Site Revenues. In (i) the period in any Year
following the point at which Site Revenues exceed *** (in
the case of Year 1), *** (in the case of Year 2), *** (in
the case of Year 3) and *** (in the case of Year 4), (ii)
any period following the point at which Site Revenues
exceed *** in the aggregate and (iii) any Renewal Term, B&N
shall pay to AOL with respect to Site Revenues after such
point: (a) *** of Advertising Revenues; plus (b) *** of
Transaction Revenues with respect to each Product other
than ***; plus (c) if in Year 1 or Year 2, *** of
Transaction Revenues with respect to each ***; plus (d) if
in Year 3 or Year 4, *** of Transaction Revenues with
respect to ***. In the case of Transaction Revenues arising
from and traceable to a third party area on the AOL Service
("Affiliate Sales"), Transaction Revenues shall be net of
the actual commission paid by B&N to the entity controlling
such third party area; provided that, in no event shall the
payment to AOL with respect to Affiliate Sales be less than
*** of Transaction Revenues. In the case of any Transaction
Revenues arising through the International Services in
excess of *** any Year, B&N shall pay to AOL *** of
Transaction Revenues arising during the remainder of such
Year; provided that such incremental Transaction Revenues
shall not count towards the aggregated revenue thresholds
listed above in this Section 4.2.
4.3. Alternative Revenue Streams. In the event B&N or its
Affiliates receives or desires to receive, directly or
indirectly, any compensation in connection with the
Affiliated B&N Site other than Site Revenues described
herein (an "Alternative Revenue Stream"), B&N will promptly
inform AOL in writing, and the Parties will negotiate in
good faith regarding whether B&N will be allowed to market
Products producing such Alternative Revenue Stream to AOL
Members through the Affiliated B&N Site, and if so, the
equitable portion of such Alternative Revenue Stream (if
applicable) that will be shared with AOL.
4.4. Wired Payments; Late Payments. All payments required under
this Section 4 will be paid in immediately available,
non-refundable funds wired to AOL's account. All amounts
owed hereunder not paid within fifteen (15) days following
the date such amounts are due and payable will bear
interest from such fifteenth day at the prime rate in
effect at such time.
4.5. Auditing Rights. Each Party shall maintain complete, clear
and accurate records of all expenses, revenues, fees and
other transactions in connection with the performance of
this
*** Confidential portions of this document have been redacted and have been
filed separately with the Commission.
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Agreement. For the sole purpose of ensuring compliance with
this Agreement, each Party shall have the right, at its
expense and not more than once every twelve (12) months, to
direct an independent certified public accounting firm to
conduct a reasonable and necessary inspection of portions
of the books and records of the other Party which are
relevant to such other Party's performance pursuant to this
Agreement. Any such audit may be conducted after twenty
(20) business days prior written notice.
4.6. Taxes. B&N shall collect and pay and indemnify and hold AOL
harmless from, any sales, use, excise, import or export
value added or similar tax or duty not based on AOL's net
income, including any penalties and interest, as well as
any costs associated with the collection or withholding
thereof, including attorneys' fees.
4.7. Reports.
4.7.1. Sales Reports. B&N will provide AOL in an
automated manner with a monthly report in a
mutually agreed format, detailing the following
activity in such period (and any other information
mutually agreed upon by the Parties or reasonably
required for measuring revenue activity by B&N
through the Affiliated B&N Site, if available):
summary sales information by day (date, number of
Products, number of orders, and total Transaction
Revenues). If commercially feasible, B&N will
report Transaction Revenues by AOL Network area
and by Product categories. More generally, each
payment to be made pursuant to this Section 4
shall be accompanied by a report containing
information which supports the payment, including
information identifying (i) Transaction Revenues
and all items deducted or excluded to produce
Transaction Revenues, including, without
limitation, chargebacks and credits for returned
or cancelled goods or services (and, where
possible, an explanation of the type of reason
therefor, e.g., bad credit card information, poor
customer service, etc.) and (ii) any applicable
Advertising Revenues.
4.7.2. Fraudulent Transactions. To the extent permitted
by applicable laws, B&N will provide AOL with a
prompt report of any fraudulent order, including
the date, screenname and amount associated with
such order, following B&N obtaining knowledge that
the order is, in fact, fraudulent.
5. TERM; RENEWAL; TERMINATION.
5.1. Term. Unless earlier terminated as set forth herein, the
initial term of this Agreement will be for *** (the
"Initial Term").
5.2. Renewal. Upon conclusion of the Initial Term, AOL will have
the right to renew this Agreement for up to *** (each a
"Renewal Term" and together with the Initial Term, the
"Term") with respect to the AOL Service or the AOL Service
and the other AOL Network areas or portions thereof, by
providing B&N with notice
*** Confidential portions of this document have been redacted and have been
filed separately with the Commission.
-10-
of AOL's intention to renew the Agreement for a subsequent
Renewal Term no later than *** days prior to the
commencement of such Renewal Term. During any Renewal Term:
(i) *** and (ii) AOL will not be required to undertake any
*** (iii) for so long as AOL may elect to maintain ***
commitments contained herein during a Renewal Term, B&N
will continue to perform its ***.
5.3. Termination for Breach. Either Party may terminate this
Agreement at any time in the event of a material breach of
the Agreement by the other Party which remains uncured
after thirty (30) days written notice thereof to the other
Party (or such shorter period as may be specified elsewhere
in this Agreement); provided that AOL will not be required
to provide notice to B&N in connection with B&N's failure
to make any payment to AOL required hereunder and the cure
period with respect to any scheduled payment shall be
fifteen (15) days from the date for such payment provided
for herein.
5.4. Termination for Bankruptcy/Insolvency. 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.
5.5. Termination on Change of Control. In the event of a Change
of Control of B&N ***, AOL may terminate this Agreement by
providing thirty (30) days prior written notice to B&N of
such intent to terminate. ***.
5.6. Termination for Impressions Shortfall. If, as of the end of
any Year, the Shortfall with respect to such Year is
greater than ***, B&N may terminate this Agreement by
providing thirty (30) days prior written notice to AOL of
such intent to terminate, such notice to be given within
forty-five (45) days after the end of such Year and to be
effective as of the end of the first Quarter immediately
following such Year.
6. MANAGEMENT COMMITTEE/ARBITRATION. If the Parties are unable to resolve
any dispute, controversy or claim arising under this Agreement
(excluding any disputes relating to intellectual property rights or
confidentiality) (each a "Dispute"), such Dispute shall be submitted to
the Management Committee for resolution. If the Management Committee is
unable to resolve the Dispute within ten (10) business days after
submission to them, the Dispute shall be solely and finally settled by
expedited arbitration in New York, New York under the auspices of the
American Arbitration Association; provided that the Federal Rules of
Evidence shall apply in toto to any such Dispute and, subject to the
arbitrators' discretion to limit the time for and scope of discovery,
the Federal Rules of Civil Procedure shall apply with respect to
discovery; and provided further that, consistent with the parties'
desire to avoid waste of time and unnecessary expense, any Dispute
arising from any provision of the Agreement which expressly or
implicitly provides for the parties to reach mutual agreement as to
certain terms therein shall not be submitted to arbitration but shall
be resolved in good faith by the Management Committee. The arbitrator
may
*** Confidential portions of this document have been redacted and have been
filed separately with the Commission.
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enter a default decision against any Party who fails to participate in
the arbitration proceedings. For purposes herein, the "Management
Committee" shall mean a committee made up of one (1) 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. Any judgment by the arbitrator
may be enforced in any court of competent jurisdiction. The arbitrator
may not amend the provisions of the Agreement without the written
agreement of the Parties.
7. BROADBAND DISTRIBUTION. To the extent that the AOL Service is delivered
through a broadband distribution modem (e.g., cable modem): (i) B&N
will, at its expense, ***; (ii) ***; and (iii) in the event that AOL's
marketing of the Affiliated B&N Site as provided for herein ***, then
the Parties shall negotiate in good faith regarding a mutually
acceptable framework ***.
8. STANDARD TERMS. The Standard Online Commerce Terms & Conditions set
forth on Exhibit D attached hereto and Standard Legal Terms &
Conditions set forth on Exhibit E attached hereto are each hereby made
a part of this Agreement.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the
Effective Date.
AMERICA ONLINE, INC. XXXXXXXXXXXXXX.XXX INC.
By: /s/ illegible By: /s/ Xxxx X. Xxxxxxxxx
--------------------------- --------------------------
Print Name: illegible Print Name: Xxxx X. Xxxxxxxxx
------------------- ------------------------
Title: Senior Vice President Title: Vice President
------------------------ ------------------------
*** Confidential portions of this document have been redacted and have been
filed separately with the Commission.
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EXHIBIT A
Definitions
The following definitions will apply to this Agreement:
Additional B&N Channel. Any other online distribution channel through which B&N
makes available an offering comparable in nature to the Affiliated B&N Site.
Advertising Revenues. The combination of AOL Advertising Revenues and Internet
Advertising Revenues:
AOL Advertising Revenues. Aggregate amounts collected plus the fair
market value of any other compensation received (such as barter
advertising, but excluding coop advertising (which includes advertising
of B&N and B&N Products by members of B&N's "Affiliates Program", and
third party Content permitted under Section 2.1) by B&N or its agents,
as the case may be, arising from the license or sale of advertisements,
promotions, links or sponsorships ("Advertisements") to appear within
any pages of the Affiliated B&N Site which may be exclusively available
to AOL Members ("AOL-based Advertisements"), less applicable
Advertising Sales Commissions.
Internet Advertising Revenues. For each Advertisement on a page of the
Affiliated B&N Site which is not exclusively available to AOL Members,
the product of: (a) the amount collected plus the fair market value of
any other compensation received (such as barter advertising, but
excluding coop advertising (which includes advertising of B&N and B&N
Products by members of B&N's "Affiliates Program", and third party
Content permitted under Section 2.1) by B&N or its agents arising from
the license or sale of such Advertisement attributable to a given
period of time, less applicable Advertising Sales Commissions, and (b)
the quotient of (i) Impressions on the page containing such
Advertisement by AOL Members for such period of time divided by (ii)
total Impressions on the page containing such Advertisement by all
users for such period of time (the "Internet Advertising Quotient") (or
such other percentage or formula as is mutually agreed upon in writing
by the Parties). B&N will be responsible for calculating the Internet
Advertising Quotient related to Internet Advertising Revenues.
Advertising Sales Commission. (i) Actual amounts paid as commission to third
party agencies in connection with sale of the Advertisement or (ii) 15% in the
event the Party has sold the Advertisement directly and will not be deducting
any third party agency commissions.
Affiliated B&N Site. The specific area in the AOL Service to be promoted and
distributed by AOL hereunder through which B&N can market and complete
transactions regarding its Products.
AOL Look and Feel. The elements of graphics, design, organization, presentation,
layout, user interface, navigation and stylistic convention (including the
digital implementations thereof) which are generally associated with Interactive
Sites within the AOL Service or XXX.xxx.
AOL Member. Any authorized user of the AOL Network, including any sub- accounts
using the AOL Network under an authorized master account.
*** Confidential portions of this document have been redacted and have been
filed separately with the Commission.
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AOL Network. (i) The AOL Service and (ii) any other product or service owned,
operated, distributed or authorized to be distributed by or through AOL or its
affiliates worldwide through which such party elects to offer Promotions.
AOL Purchaser. Any person or entity who enters the Affiliated B&N Site from the
AOL Network, including, without limitation, from any third party area therein
(to the extent entry from such third party area is traceable through both
Parties' commercially reasonable efforts), and generates Transaction Revenues
(regardless of whether such person or entity provides an e-mail address during
registration which includes a domain other than an "XXX.xxx" domain); provided
that any person or entity reasonably traceable as an AOL Purchaser at the time
of a subsequent purchase who has previously satisfied the definition of AOL
Purchaser will remain an AOL Purchaser, and such subsequent purchase by such
person or entity through a B&N Interactive Site will also give rise to
Transaction Revenues hereunder (and will not be conditioned on the person or
entity's satisfaction of the first clause of this definition set forth above).
AOL Service. The U.S. version of the proprietary America Online(R) brand
service, specifically excluding (a) XXX.xxx or any other AOL Interactive Site,
(b) any international versions of the AOL Service (e.g., the International
Services), (c) "Driveway," "AOL NetFind," "AOL Instant Messenger" or any
similar, separate sub-product which may be available through the U.S. version of
the America Online(R) brand service, (d) DCI Areas, Greenhouse Properties or any
similar "sub-service" offered by or through the U.S. version of the America
Online(R) brand service, (e) classifieds, yellow pages, search and directory
resources or similar directory products, (f) any other programming or content
area offered by or through the U.S. version of the America Online(R) brand
service over which AOL does not exercise operational control, and (g) any third
party information provider areas or brands which may be acquired by AOL
subsequent to the Effective Date (collectively, the "Excluded Areas"), ***.
Books. New, paper-based, retail books, and electronically delivered versions of
such books (provided such books have ISBN numbers and are enhanced only as to
navigation as such term is currently understood), and new and used college
textbooks (in each case for so long as B&N actively markets such Product
category).
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 other than to an entity controlled by, controlling or under common
control with, such 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 1933, 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 the 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 and B&N
customers, technical processes and formulas, source codes, product designs,
sales, cost and other unpublished financial information, product and business
plans, projections, and marketing data. "Confidential
*** Confidential portions of this document have been redacted and have been
filed separately with the Commission.
-14-
Information" will not include information (a) already lawfully known to or
independently developed by the receiving Party, (b) disclosed in published
materials, (c) generally known to the public, (d) lawfully obtained from any
third party, or (e) information required to be disclosed by law.
Content. Information, materials, features, Products, advertisements, promotions,
links, pointers and software, including any modifications, upgrades, updates,
enhancements and related documentation.
DCI Areas. The comprehensive, local, interactive programming areas created by
Digital Cities, Inc. ("DCI") and distributed under the DCI brand through
AOL-based content forms on the AOL Service (excluding the applicable Excluded
Areas).
Exclusive Service. The marketing of Books online ***.
Greenhouse Properties. Subject to Section 3.5 of the Agreement, the following
interactive content properties majority-owned by Greenhouse Networks, Inc.
("GHN") and distributed under a "Greenhouse"-affiliated brand through AOL-based
content forms on the AOL Service (excluding the applicable Excluded Areas):
Entertainment Asylum, Electra, Love@AOL, Santa's Homepage, and Extreme Fans.
Impressions. User exposure to the page containing the applicable Promotion, as
such exposure may be reasonably determined and measured by AOL in accordance
with its standard methodologies and protocols.
Interactive Service. Any entity or division that as its primary business offers
online or Internet connectivity (or any successor form of connectivity),
aggregates and/or distributes a broad selection of third-party interactive
Content, or provides interactive navigational services ***.
Interactive Site. Any interactive site or area (other than the Affiliated B&N
Site or the AOL Network) which is managed, maintained, owned or controlled by a
Party or its agents, including, by way of example and without limitation, (i) a
Party's 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 or
interactive environment such as Microsoft's proposed "Active Desktop."
International Services. The versions of the AOL Service currently marketed in
the United Kingdom, France, Japan, Australia and Canada under the AOL brand by
affiliates of AOL, and any future non-U.S. online Internet services marketed
under the AOL brand by AOL or any of its affiliates added pursuant to Section
3.5 of the Agreement, in each case excluding the applicable Excluded Areas.
Level A. Inventory within the AOL Network that would, in both Parties'
reasonable judgment, fall within the ***, based on (the "Measurement Criteria")
(i) *** (or, for promotional inventory which does not have a published ***),
(ii) *** over the prior three month period (or shorter period of availability)
for such inventory, and (iii) ***. ***.
Level B. Inventory within the AOL Network that would, in both Parties'
reasonable judgment, fall within the *** based on the Measurement Criteria. ***.
*** Confidential portions of this document have been redacted and have been
filed separately with the Commission.
-15-
Level C. Inventory within the AOL Network that would, in both Parties'
reasonable judgment, fall within the *** based on the Measurement Criteria. ***.
Licensed Content. All Content offered through the Affiliated B&N Site pursuant
to this Agreement, including any modifications, upgrades, updates, enhancements,
and related documentation.
National Book Retailer. The entities listed on Exhibit F, together with any
future third party entities that have book-retailing operations comparable in
scope and nature to, and materially competitive with, B&N.
Site Revenues. The combination of Transaction Revenues and Advertising Revenues.
Product. Any product, good or service which B&N offers, sells or licenses to AOL
Purchasers through (i) the Affiliated B&N Site (including through any
Interactive Site linked thereto) or (ii) an "offline" means (e.g., toll-free
number) for receiving orders related to specific offers within the Affiliated
B&N Site requiring purchasers to reference a specific promotional identifier or
tracking code.
Quarter. Beginning with the Effective Date, (i) for Year 1, the first two
three-month periods followed by two four-month periods, (ii) for Year 2, the
first three three-month periods followed by one four-month period, and (iii) for
each of Year 3 and Year 4, four three-month periods. For example, in Year 1, the
Quarters would be November 1, 1997 - January 31, 1998, February 1, 1998 - April
30, 1998, May 1, 1998 - August 30, 1998 and September 1, 1998 - December 31,
1998.
Transaction Revenues. Aggregate amounts paid by AOL Purchasers to B&N or its
agents in connection with the sale, licensing, distribution or provision of any
Products, excluding, in each case, (a) handling, shipping, and service charges,
(b) amounts collected for sales or use taxes or duties, and (c) credits and
chargebacks for returned or cancelled goods or services, but not excluding cost
of goods sold or any similar cost.
Year. The first four Quarters in the case of Year 1, the second four Quarters in
the case of Year 2, the third four Quarters in the case of Year 3 and the fourth
four Quarters in the case of Year 4.
*** Confidential portions of this document have been redacted and have been
filed separately with the Commission.
-16-
EXHIBIT B
B&N Cross-Promotion
Online
In each B&N Interactive Site (excluding those devoted to providing information
about physical Xxxxxx & Xxxxx store locations), B&N will include on its homepage
a "Try AOL" feature through which users can obtain promotional information about
AOL products and services and, at AOL's option, download or order AOL's
then-current version of client software for the AOL Service or software for any
other AOL products or services (e.g., AOL's Instant Messenger service).
Offline
In instances when B&N makes promotional reference to its Interactive Sites
(e.g., in television, radio and print advertisements), B&N will include a
specific reference (verbally where possible) of the Affiliated B&N Site's
availability through America Online(R) which is at least equal in prominence to
references for any other B&N Interactive Site. Any listings of the URL(s) for
B&N Interactive Sites by B&N will include a listing of the AOL "keyword" for the
Affiliated B&N Site of at least equal prominence to the URL reference.
----------
1 AOL will pay B&N a standard bounty for each person who registers for the
AOL Network using B&N's special identifier for this promotion and
subsequently pays AOL monthly usage fees across at least two (2) billing
cycles for the use of the AOL Network. Note that if this promotion is
delivered through Microsoft's Active Desktop or any other "push" product
(an "Operating System"), such feature will link users directly to AOL
software within the Operating System or direct users without Internet
access to an AOL application setup program within the Operating System (all
subject to any standard policies of the Operating System).
*** Confidential portions of this document have been redacted and have been
filed separately with the Commission.
-17-
EXHIBIT C
Operating Standards
General. Subject to limitations imposed by AOL pursuant to the Agreement (such
as limiting the offering of non-Book Products or third party Content under
Section 2.1), the Affiliated B&N Site (including the Products and other Content
contained therein) will generally be in the top three (3) in the online book
retailing industry with respect to all material, published performance and
quality averages or standards. In that regard, the (i) pricing of Products, (ii)
scope and selection of Products, (iii) quality of Products, (iv) customer
service and fulfillment associated with the marketing and sale of Products, (v)
design/graphical user interface and ease-of-use of the Affiliated B&N Site and
(vi) functionality associated with the Affiliated B&N Site, will, with respect
to each measure, be competitive in all material respects with that which is
offered by any National Book Retailer. AOL reserves the right to conduct focus
group testing to assess the competitiveness of the design, ease-of-use and
functionality of the Affiliated B&N Site.
Hosting; Capacity. B&N will provide all computer servers, routers, switches and
associated hardware in an amount reasonably necessary to meet anticipated
traffic demands, adequate power supply (including generator back-up) and XXXXXX,
adequate insurance, adequate service contracts and all necessary equipment
racks, floor space, network cabling, and power distribution to support the
Affiliated B&N Site (collectively, "Hosting Infrastructure"). In the event B&N
fails to satisfy this requirement, AOL will have the right (in addition to any
other remedies available to AOL hereunder) to regulate the promotions it
provides to B&N hereunder to the extent necessary to minimize user delays until
such time as B&N corrects its infrastructure deficiencies.
Speed; Accessibility. B&N will ensure that the performance and availability of
the Affiliated B&N Site: (a) is monitored on a continuous, 24/7 basis and (b)
remains competitive in all material respects with the performance and
availability of other similar sites based on similar form technology. B&N will
use commercially reasonable efforts to ensure that: (a) the functionality and
features within the Affiliated B&N Site are optimized for the AOL client
software then in use by AOL Members; and (b) the Affiliated B&N Site is designed
and populated in a manner that minimizes delays when AOL Members attempt to
access such site.
Service Level Response. B&N agrees to use commercially reasonable efforts to
provide the following service levels in response to problems with or
improvements to the Affiliated B&N Site.
1. For material functions of software that are or have become entirely or
substantially inoperable, B&N will provide a bug fix or workaround within
two business days after the first report of such error.
2. For functions of the software that are impaired or that otherwise fail to
operate in accordance with agreed upon specifications, B&N will provide a
bug fix or workaround within three business days after the first report of
such error.
3. For errors disabling only certain non-essential functions, B&N will provide
a bug fix or workaround within sixty days after the first report of such
error.
*** Confidential portions of this document have been redacted and have been
filed separately with the Commission.
-18-
4. For all other errors, B&N will address these requests on a case-by-case
basis as soon as reasonably feasible.
Monitoring. AOL Network Operations Center (NOC) will work with a B&N- designated
technical contact in the event of any performance malfunction or other emergency
related to the Affiliated B&N Site and will either assist or work in parallel
with B&N's contact using B&N tools and procedures, as applicable. The Parties
will develop a process to monitor performance and member behavior with respect
to access, capacity, security and related issues both during normal operations
and during special promotions/events. The Parties will also enter into a Service
Level Agreement with AOL on customary terms and conditions which will provide
B&N with (a) technical due diligence, and supplemental quarterly review, of the
Affiliated B&N Site, and (b) a primary AOL technical contact.
Telecommunications. The Parties agree to explore 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 Members. The network will be sized such that no
single line runs at more than 70% average utilization for a five-minute peak in
a daily period.
Security Review. B&N and AOL will work together to perform an initial security
review of, and to perform tests of, the B&N system, network, and service
security in order to evaluate the security risks and provide recommendations to
B&N, including periodic follow-up reviews as reasonably required by B&N or AOL.
B&N will use commercially reasonable best efforts to fix any security risks or
breaches of security as may be identified by AOL's Operations Security. Specific
services to be performed on behalf of B&N by AOL's Operations Security team will
be as determined by AOL in its sole discretion. The Affiliated B&N Site will use
Internet Industry Standard encryption for private member information (i.e.
40-bit SSL encryption).
Technical Performance. B&N will perform the following technical obligations (and
any reasonable updates thereto from time to time by AOL):
1. B&N will design the Affiliated B&N Site to support the Windows versions of
the Microsoft Internet Explorer 4.0, 3.02 (32-bit) and 3.01 (16-bit)
browsers, and make commercially reasonable efforts to support all other AOL
browsers listed at: xxxx://xxxxxxxxx.xxxx.xxx.xxx/XxxxXxxxx.xxxx.
2. B&N will configure the server from which it serves the site to examine the
HTTP User-Agent field in order to identify the AOL Member-Agents listed at:
xxxx://xxxxxxxxx.xxxx.xxx.xxx/Xxxx0Xxxx.xxxx (the "AOL Member-Agents").
3. B&N will design its site to support HTTP 1.0 or later protocol as defined
in RFC 1945 (available at xxxx://xx.xxxxxxxx.xxx/xxx/xxx0000.xxxx) and to
adhere to AOL's parameters for refreshing cached information listed at
xxxx://xxxxxxxxx.xxxx.xxx.xxx/XxxxxXxxx.xxxx.
4. B&N will provide continuous navigational ability for AOL Members to return
to a mutually agreed-upon point on the AOL Network from the Affiliated B&N
Site.
5. B&N will use commercially reasonable efforts to ensure that the majority of
the Affiliated B&N Site (in particular its graphics) is designed to conform
with the AOL proxy and caching system.
*** Confidential portions of this document have been redacted and have been
filed separately with the Commission.
-19-
EXHIBIT D
Standard Online Commerce Terms & Conditions
1. AOL Network Distribution. Except for members of B&N's "Affiliates Program,"
B&N will not authorize or permit any third party to distribute or promote the
Affiliated B&N Site through the AOL Network absent AOL's prior written approval.
Nothing in this Section 1 is intended to modify any agreement between AOL and
any member of B&N's "Affiliates Program."
2. Provision of Other Content. In the event that AOL notifies B&N that (i) as
reasonably determined by AOL, any Content within the Affiliated B&N Site
violates AOL's then-standard Terms of Service (as set forth on the America
Online(R) brand service), the terms of this Agreement or any other standard,
written AOL policy or (ii) AOL reasonably objects to the inclusion of any
Content within the Affiliated B&N Site (other than any specific items of Content
which may be expressly identified in this Agreement), then B&N shall take
commercially reasonable steps to block access by AOL Members to such Content
using B&N's then-available technology. In the event that B&N cannot, through its
commercially reasonable efforts, block access by AOL Members to the Content in
question, then B&N shall provide AOL prompt written notice of such fact. AOL may
then, at its option, restrict access from the AOL Network to the Content in
question using technology available to AOL. B&N will cooperate with AOL's
reasonable requests to the extent AOL elects to implement any such access
restrictions.
3. Contests. B&N will take all steps necessary to ensure that any contest,
sweepstakes or similar promotion conducted or promoted through the Affiliated
B&N Site (a "Contest") complies with all applicable federal, state and local
laws and regulations.
4. Navigational Icons. Subject to the prior consent of B&N, which consent will
not be unreasonably withheld with respect to links within the AOL Network, AOL
will be entitled to establish navigational icons, links and pointers connecting
the Affiliated B&N Site (or portions thereof) with other content areas on or
outside of the AOL Network.
5. Disclaimers. Upon AOL's request, B&N agrees to include within the Rainman
Screens a product disclaimer (the specific form and substance to be mutually
agreed upon by the Parties) indicating that transactions are solely between B&N
and AOL Members purchasing products from B&N.
6. AOL Look and Feel. B&N acknowledges and agrees that AOL will own all right,
title and interest in and to the elements of graphics, design, organization,
presentation, layout, user interface, navigation and stylistic convention
(including the digital implementations thereof) which are generally associated
with online areas contained within the AOL Network ("the AOL Look and Feel"),
subject to B&N's ownership rights in any B&N trademarks, copyrighted material or
other material in which B&N has a proprietary interest, within the Affiliated
B&N Site.
7. Management of the Affiliated B&N Site. B&N will manage, review, delete, edit,
create, update and otherwise manage all Products available on or through the
Affiliated B&N Site, in a timely and professional manner and in accordance with
the terms of this Agreement. B&N will use its best efforts to ensure that the
Affiliated B&N Site is current, accurate and well-
*** Confidential portions of this document have been redacted and have been
filed separately with the Commission.
-20-
organized at all times. B&N warrants that the Affiliated B&N Site, including all
Products and Contents available therein: (i) will not infringe on or violate any
copyright, trademark, U.S. patent or any other third party right, including
without limitation, any music performance or other music-related rights; (ii)
will not violate AOL's then-applicable Terms of Service; and (iii) will not
contain any Product which violates any applicable law or regulation, including
those relating to contests, sweepstakes or similar promotions. AOL will have no
obligations with respect to the Products available on or through the Affiliated
B&N Site, including, but not limited to, any duty to review or monitor any such
Products.
8. Duty to Inform. B&N will promptly inform AOL of any information of which it
has knowledge related to the B&N Service or Affiliated B&N Site which could
reasonably lead to a claim, demand, or liability of or against AOL and/or its
affiliates by any third party.
9. Customer Service. It is the sole responsibility of B&N to provide customer
service to persons or entities purchasing Products through the AOL Network
("Customers"). B&N will bear full responsibility for all customer service,
including without limitation, order processing, billing, fulfillment, shipment,
collection and other customer service associated with any Products offered, sold
or licensed through the Affiliated B&N Site, and AOL will have no obligations
whatsoever with respect thereto. B&N will receive all emails from Customers via
a computer available to B&N's customer service staff and generally respond to
such emails within one business day of receipt. B&N will receive all orders
electronically and generally process all orders within one business day of
receipt, provided Products ordered are not advance order items. B&N will ensure
that all orders of Products are received, processed, fulfilled and delivered on
a timely and professional basis. B&N will offer AOL Members who purchase
Products through such Affiliated B&N Site a money back satisfaction guarantee.
B&N will bear all responsibility for compliance with federal, state and local
laws in the event that Products are out of stock or are no longer available at
the time an order is received. B&N will also comply with the requirements of any
federal, state or local consumer protection or disclosure law. Payment for
Products will be collected by B&N directly from customers. B&N's order
fulfillment operation will be subject to AOL's reasonable review.
10. Production Work. In the event that B&N requests AOL's production assistance
in connection with (i) ongoing programming and maintenance related to the
Affiliated B&N Site, (ii) a redesign of or addition to the Affiliated B&N Site
(e.g., a change to an existing screen format or construction of a new custom
form), (iii) production to modify work performed by a third party provider or
(iv) any other type of production work, B&N will work with AOL to develop a
detailed production plan for the requested production assistance (the
"Production Plan"). Following receipt of the Production Plan, AOL will notify
B&N of (i) AOL's availability to perform the requested production work, (ii) the
proposed fee or fee structure for the requested production and maintenance work
and (iii) the estimated development schedule for such work. To the extent the
Parties reach agreement regarding implementation of an agreed-upon Production
Plan, such agreement will be reflected in a separate work order signed by the
Parties. To the extent B&N 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 & Practices (a copy of which
will be supplied by AOL to B&N upon request). The specific production resources
which AOL allocates to any production work to be performed on behalf of B&N will
be as determined by AOL in its sole discretion.
*** Confidential portions of this document have been redacted and have been
filed separately with the Commission.
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11. Overhead Accounts. AOL will grant B&N a reasonable number of overhead
accounts on the AOL Network. B&N will be responsible for the actions taken under
or through its overhead 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 overhead Account issued to B&N, but B&N will not be
liable for charges incurred by any overhead 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 overhead 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 overhead account.
12. Merchant Certification Program. If B&N elects to participate in any
generally applicable "Certified Merchant" program operated by AOL or its
authorized agents or contractors, B&N will need to, on an ongoing basis, meet
certain reasonable standards relating to provision of electronic commerce
through the AOL Network and B&N may also be required to pay certain reasonable
certification fees to the applicable entity operating the program.
*** Confidential portions of this document have been redacted and have been
filed separately with the Commission.
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EXHIBIT E
Standard Legal Terms & Conditions
1. Promotional Materials/Press Releases. Each Party will submit to the other
Party, for its prior written approval, which will not be unreasonably withheld
or delayed, any marketing, advertising, press releases, and all other
promotional materials related to the Affiliated B&N Site and/or referencing the
other Party and/or its trade names, trademarks, logos and service marks (the
"Materials"); provided, however, that either Party's use of unaltered screen
shots of the Affiliated B&N Site for promotional purposes will not require the
approval of the other Party so long as the AOL Network is clearly identified as
the source of such screen shots. Each Party will solicit and reasonably consider
the views of the other Party in designing and implementing such Materials. Once
approved, the Materials may be used by a Party and its affiliates for the
purpose of promoting the Affiliated B&N Site and the content contained therein
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 Materials may be depleted. Notwithstanding the
foregoing, either Party may issue press releases and other disclosures as
required by law or as reasonably advised by legal counsel without the consent of
the other Party and in such event, prompt notice thereof will be provided to the
other Party.
2. License. B&N hereby grants AOL a non-exclusive worldwide license to market,
license, distribute, reproduce, display, perform, transmit and promote the
Affiliated B&N Site and, for the benefit of the Affiliated B&N Site, the
Products contained therein (or any portion thereof) through such areas or
features of the AOL Network as AOL deems appropriate. AOL Members will have the
right to access and use the Affiliated B&N Site. Subject to the foregoing
license, B&N retains all right, title and interest in the Affiliated B&N Site
and the Contents thereof.
3. Trademark License. In designing and implementing the Materials and subject to
the other provisions contained herein, including without limitation Section 1
above, (a) B&N will be entitled to use the following trade names, trademarks,
and service marks of AOL (collectively, the "AOL Marks"): the "America
Online(R)" brand service, "AOL(TM)" service/software and AOL's triangle logo;
and AOL and its Affiliates will be entitled to use the "Xxxxxx & Xxxxx(R)"
trademark (the "B&N Xxxx, and together with the AOL Marks, the "Marks");
provided that each Party: (i) does not create a unitary composite xxxx involving
a Xxxx 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 as instructed by
the other Party.
4. Ownership of Trademarks. Each Party acknowledges the ownership of the other
Party in the Marks of the other Party and agrees that all use of the other
Party's Marks will inure to the benefit, and be on behalf, of the other Party.
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.
5. Quality Standards. Each Party agrees that the nature and quality of its
products and services supplied in connection with the other Party's Marks
*** Confidential portions of this document have been redacted and have been
filed separately with the Commission.
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will conform to quality standards set by the other Party. 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 will comply with all applicable laws, regulations, and customs
and obtain any required government approvals pertaining to use of the other
Party's marks.
6. 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 will 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
with its reasonable cooperation and assistance with respect to any such
infringement proceedings.
7. 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 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; and (iv) such Party
acknowledges that the other Party makes no representations, warranties or
agreements related to the subject matter hereof that are not expressly provided
for in this Agreement. Each Party further represents and warrants to the other
Party that it is the sole and exclusive owner of the B&N Xxxx or the AOL Marks,
as the case may be, and/or has the right and power to license to the other Party
the B&N Xxxx or the AOL Marks, as the case may be, and such license does not and
will not (i) breach, conflict with or constitute a default under any agreement
or other instrument applicable to such Party or binding upon its assets or
properties or (ii) infringe upon any trademark, trade name, service xxxx,
copyright or other proprietary right of any other person or entity.
8. Confidentiality. 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 five (5) years following expiration or
termination of this Agreement, to prevent the duplication or disclosure of
Confidential Information of the other Party, other than by or to its employees
or agents who must have access to such Confidential Information to perform such
Party's obligations hereunder. 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. 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
*** Confidential portions of this document have been redacted and have been
filed separately with the Commission.
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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.
9. Limitation of Liability; Disclaimer; Indemnification.
9.1. Liability. UNDER NO CIRCUMSTANCES WILL 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 THE AGREEMENT, THE SALE OF PRODUCTS, THE USE OR INABILITY
TO USE THE AOL NETWORK, THE AOL SERVICE, XXX.XXX OR THE AFFILIATED B&N SITE, OR
ARISING FROM ANY OTHER PROVISION OF THIS AGREEMENT, SUCH AS, BUT NOT LIMITED TO,
LOSS OF REVENUE OR ANTICIPATED PROFITS OR LOST BUSINESS ("COLLECTIVELY,
"DISCLAIMED DAMAGES"); PROVIDED THAT EACH PARTY WILL REMAIN LIABLE TO THE OTHER
PARTY TO THE EXTENT ANY DISCLAIMED DAMAGES ARE CLAIMED BY A THIRD PARTY AND ARE
SUBJECT TO INDEMNIFICATION PURSUANT TO SECTION 9.3. EXCEPT AS PROVIDED IN
SECTION 9.3, NEITHER PARTY WILL BE LIABLE TO THE OTHER PARTY FOR MORE THAN
$40,000,000; PROVIDED THAT EACH PARTY WILL REMAIN LIABLE FOR THE AGGREGATE
AMOUNT OF ANY PAYMENT OBLIGATIONS OWED TO THE OTHER PARTY PURSUANT TO SECTION 4.
9.2. No Additional Warranties. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT,
NEITHER PARTY MAKES ANY, AND EACH PARTY HEREBY SPECIFICALLY DISCLAIMS ANY
REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, REGARDING THE AOL NETWORK,
THE AOL SERVICE, XXX.XXX OR THE AFFILIATED B&N SITE, 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, AOL SPECIFICALLY DISCLAIMS ANY
WARRANTY REGARDING THE PROFITABILITY OF THE AFFILIATED B&N SITE.
9.3. Indemnity. Either 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 of
any duty, representation, or warranty of this Agreement, except where
Liabilities result from the gross negligence or knowing and willful misconduct
of the other Party.
9.4. Claims. Each Party agrees to (i) promptly notify the other Party in writing
of any indemnifiable claim and give the other Party the opportunity to defend or
negotiate a settlement of any such claim at such other Party's expense, and (ii)
cooperate fully with the other Party, at that other Party's expense, in
defending or settling such claim. AOL reserves the right, at its own expense, to
assume the exclusive defense and control of any matter otherwise subject to
indemnification by B&N hereunder, and in such event, B&N will have no further
obligation to provide indemnification for such matter hereunder.
9.5. Acknowledgment. AOL and B&N 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 9 will be
enforceable independent of and severable from any other enforceable or
unenforceable provision of this Agreement.
*** Confidential portions of this document have been redacted and have been
filed separately with the Commission.
-25-
10. Solicitation of AOL Members. During the term of this Agreement, and for the
two-year period following the expiration or termination of this Agreement,
neither B&N nor its agents will use the AOL Network to (i) solicit, or
participate in the solicitation of AOL Members when that solicitation is for the
benefit of any entity (including B&N) which could reasonably be construed to be
or become in competition with AOL or (ii) promote any services which could
reasonably be construed to be in competition with AOL including, but not limited
to, services available through the Internet. In addition, B&N may not send AOL
Members e-mail communications promoting B&N's Products through the AOL Network
without a "Prior Business Relationship." For purposes of this Agreement, a
"Prior Business Relationship" will mean that the AOL User has either (i) engaged
in a transaction with B&N through the AOL Network or (ii) voluntarily provided
information to B&N through a contest, registration, or other communication,
which included notice to the AOL User that the information provided by the AOL
User could result in an e-mail being sent to that AOL User by B&N or its agents.
A Prior Business Relationship does not exist by virtue of an AOL User's visit to
an Affiliated B&N Site (absent the elements above). More generally, B&N will be
subject to any standard policies regarding e-mail distribution through the AOL
Network which AOL may implement.
11. Collection of User Information. B&N is prohibited from collecting AOL Member
screennames from public or private areas of the AOL Network, except as
specifically provided below. B&N will ensure that any survey, questionnaire or
other means of collecting AOL Member screennames or AOL User email addresses,
names, addresses or other identifying information ("User Information"),
including, without limitation, requests directed to specific AOL Member
screennames and automated methods of collecting screennames (an "Information
Request") complies with (i) all applicable laws and regulations and (ii) any
privacy policies which have been issued by AOL in writing during the Term (the
"AOL Privacy Policies"). Each Information Request will clearly and conspicuously
specify to the AOL Members at issue the purpose for which User Information
collected through the Information Request will be used (the "Specified
Purpose").
12. Use of User Information. B&N will restrict use of the User Information
collected through an Information Request to the Specified Purpose. In no event
will B&N (i) provide User Information to any third party (except to the extent
specifically (a) permitted under the AOL Privacy Policies or (b) authorized by
the members in question), (ii) rent, sell or barter User Information, (iii)
identify, promote or otherwise disclose such User Information in a manner that
identifies AOL Members as end-users of the AOL Service, XXX.xxx or the AOL
Network or (iv) otherwise use any User Information in contravention of Section
10 above. Notwithstanding the foregoing, in the case of AOL Members who purchase
Products from B&N, B&N will be entitled to use User Information from such AOL
Members as part of B&N's aggregate list of Customers; provided that B&N's use
does not in any way identify, promote or otherwise disclose such User
Information in a manner that identifies AOL Members as end-users of the AOL
Service, XXX.xxx or the AOL Network. In addition, B&N will not use any User
Information for any purpose (including any Specified Purpose) not directly
related to the business purpose of the Affiliated B&N Site.
13. Excuse. Neither Party will 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.
*** Confidential portions of this document have been redacted and have been
filed separately with the Commission.
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14. Independent Contractors. The Parties to this Agreement are independent
contractors. Neither Party is an agent, representative or partner of the other
Party. Neither Party will 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 will 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.
15. 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 on the delivery date if
delivered by electronic mail on the AOL Network or (i) on the delivery date if
delivered personally to the Party to whom the same is directed or by a
commercial overnight carrier, with written verification of receipt, or (ii) 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, (a) if to
AOL, to Xxxxx Xxxxxxx with a copy to Xxxx Xxxxxx, each at the address of AOL set
forth in the first paragraph of this Agreement, and (b) if to B&N, to Xxxx
Xxxxxxxxx at the address of AOL set forth in the first paragraph of this
Agreement, with a copy to Xxx Xxxxxx at Xxxxxxxx Xxxxxxxxx Xxxxxx Xxxxxxxx &
Xxxxxx LLP, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
16. 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 will not be construed as a waiver or
relinquishment to any extent of such Party's right to assert or rely upon any
such provision or right in that or any other instance; rather, the same will be
and remain in full force and effect.
17. Return of Information. Upon the expiration or termination of this Agreement,
each Party will, 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 confidential materials specified by the other
Party.
18. Survival. Sections 8 through 12 of this Exhibit will survive the completion,
expiration, termination or cancellation of this Agreement.
19. 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, including without limitation the Interactive
Marketing Agreement between the Parties dated as of January 24, 1997, except for
advertising ordered prior to the execution of the Agreement plus approximately
$44,000 of additional advertising to be ordered under Section 3.3 of the prior
agreement. Neither Party will 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.
20. Amendment. No change, amendment or modification of any provision of this
Agreement will be valid unless set forth in a written instrument signed by the
Party subject to enforcement of such amendment.
*** Confidential portions of this document have been redacted and have been
filed separately with the Commission.
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21. Further Assurances. Each Party will take such action (including, but not
limited to, the execution, acknowledgment and delivery of documents) as may
reasonably be requested by any other Party for the implementation or continuing
performance of this Agreement.
22. Assignment. Neither Party will assign this Agreement or any right, interest
or benefit under this Agreement without the prior written consent of the other
Party,***. Subject to the foregoing, this Agreement will be fully binding upon,
inure to the benefit of and be enforceable by the Parties hereto and their
respective successors and assigns.
23. 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 will 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 will remain in full force and
effect.
24. 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; provided that, in connection with any dispute hereunder, B&N will be not
entitled to offset any disputed amounts that it claims to be due and payable
from AOL against amounts otherwise payable by B&N to AOL.
25. Applicable Law; Jurisdiction. This Agreement will 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.
26. Export Controls. Both Parties will adhere to all applicable laws,
regulations and rules relating to the export of technical data and will 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.
27. Headings. The captions and headings used in this Agreement are inserted for
convenience only and will not affect the meaning or interpretation of this
Agreement.
28. Counterparts. This Agreement may be executed in counterparts, each of which
will be deemed an original and all of which together will constitute one and the
same document.
*** Confidential portions of this document have been redacted and have been
filed separately with the Commission.
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EXHIBIT F
National Book Retailers
***
***
***
***
***
***
*** Confidential portions of this document have been redacted and have been
filed separately with the Commission.
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EXHIBIT G
***
See attached items.
*** Confidential portions of this document have been redacted and have been
filed separately with the Commission.
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