Exhibit 10.32
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR CERTAIN PORTIONS OF THIS DOCUMENT
**Confidential treatment has been requested with respect to the information
contained within the "[**]" markings. Such marked portions have been omitted
from this filing and have been filed separately with the Securities and Exchange
Commission.
eCommerce Agreement
between
xxxxxxxx.xxx, Inc. and xxxxxxxxx.xxx, inc.
This eCommerce Agreement (this "Agreement") is made as of February 1, 2000
(the "Effective Date"), by and between Xxxxxxxx.xxx, Inc., a Delaware
corporation with principal offices at 000 Xxxxxxxxx Xxxx Xxxxxxxxx, Xxxxx 0000,
Xxx Xxxxxxxxx, XX 00000 ("Snowball"), and xxxxxxxxx.xxx, inc., a Delaware
corporation with principal offices at 00000 XX Xxxxxxxx Xxx, Xxxxxxxx, XX 00000
on behalf of itself and its wholly-owned subsidiaries ("xxxxxxxxx.xxx").
Background
Snowball owns and operates a network of World Wide Web sites, including the
sites located at XXX.xxx, XxxxxXxxxx.xxx, XxxxxxXxxxx.xxx and Xxxxxxxxxxxxx.xxx
(collectively, the "Snowball Hub Sites"). The Snowball Hub Sites connect to a
network of affiliate sites (the "Affiliates"). The Snowball Hub Sites and the
Snowball Affiliates are collectively referred to in this Agreement as the
"Snowball Network."
xxxxxxxxx.xxx offers health, pharmacy, personal care, beauty and wellness
information and products through its World Wide Web site located at
xxx.xxxxxxxxx.xxx (the "xxxxxxxxx.xxx Site").
xxxxxxxxx.xxx desires to be the exclusive health, pharmacy, personal care,
and wellness e-commerce partner on the Snowball Network, and to make certain
content and services provided by xxxxxxxxx.xxx available to users of the
Snowball Network. xxxxxxxxx.xxx also desires to have links established from
sites in the Snowball Network to the xxxxxxxxx.xxx Site, to co-brand certain
areas and activities on the Snowball Network, and to obtain certain promotional
services from Snowball. xxxxxxxxx.xxx further desires to convert Snowball
Network users into buyers on the xxxxxxxxx.xxx Site.
Snowball has agreed to develop and maintain co-branded health, pharmacy,
personal care, beauty (except as specifically provided otherwise herein), and
wellness e-commerce stores ("Commerce Pages") to be integrated into each of the
Snowball Hub Sites. The Commerce Pages will be marketed with a series of links
and promotional efforts with the intention of generating commerce on the
xxxxxxxxx.xxx Site.
Now Therefore, the parties agree as follows:
1. Exclusivity. Subject to the terms and conditions of this Agreement,
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Snowball will identify xxxxxxxxx.xxx as Snowball's "exclusive health, pharmacy,
personal care, and wellness e-commerce partner" on the Snowball Network. During
the term of this Agreement, Snowball will not (and, to the extent that Snowball
has the right to do so, will cause its Affiliates to not) carry any advertising
or promotional placements (including without limitation buttons, banners, and
navigation bars) or send emails or other communications to users of the Snowball
Network with
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respect to the parties listed on Exhibit A (the "xxxxxxxxx.xxx Competitors").
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Exhibit A may be amended during the term of this Agreement with the mutual
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written consent of the parties. Notwithstanding the foregoing, nothing in this
Agreement will be deemed to restrict Snowball or its Affiliates from accepting
banner advertisements from any health, pharmacy, personal care, or wellness
retailer or information provider, including, without limitation, any
xxxxxxxxx.xxx Competitor, as long as such banner advertisements in the aggregate
are no greater than [**] of the average number of impressions
served during the prior [**]. Nothing in this Agreement will be
deemed to restrict Snowball or Affiliates from accepting advertising from any
health, pharmacy, personal care, or wellness manufacturer that is not a
xxxxxxxxx.xxx Competitor. Nor shall Snowball be deemed to be in breach of the
Agreement if, after the Effective Date, any party with which Snowball has an
agreement to sell products through the Snowball Network commences selling
health, pharmacy, personal care, or wellness products; provided that Snowball
shall be bound by the provisions of exclusivity for promotions stated in this
Section 1 with respect to such party. In addition, xxxxxxxxx.xxx acknowledges
that Snowball may incorporate or link to Web and other auction or shopping
facilities or functionalities and that the sale of health, pharmacy, personal
care, or wellness products through such facilities or functionalities will not
be deemed a breach of Snowball's obligations under this section; provided that
such incorporation or link shall not violate any of the provisions of
exclusivity for promotion stated in this Section 1.
2. Promotion and e-Commerce. Subject to the terms and conditions of this
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Agreement:
2.1 Registration.
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(a) New Registrations. Snowball will make available to each user
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registering with the Snowball Network the opportunity to register for the
xxxxxxxxx.xxx Site. Within thirty (30) days of the Effective Date of this
Agreement, xxxxxxxxx.xxx shall specify whether the registration opportunity will
be an "opt out" registration or an "opt in" registration. For purposes of this
paragraph, "opt out" registration means an automatic functionality for dual
registration of the user on both the Snowball Network and on the xxxxxxxxx.xxx
Site unless the user opts, using an offered functional indicator, not to
register with the xxxxxxxxx.xxx Site. For the purposes of this paragraph, "opt
in" registration means a functionality that permits users to affirmatively opt
to register with the xxxxxxxxx.xxx Site at the same time that the user registers
for the Snowball Network.
(b) Existing Registered Users. Snowball will send each Snowball
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Network Hub Site user registered as of the Effective Date an email message
describing xxxxxxxxx.xxx's various offers and services, as well as informing
them of the relationship between Snowball and xxxxxxxxx.xxx under this
Agreement. The content of such email message shall be mutually agreed upon by
the parties, and will include a link enabling users to access the home page of
the xxxxxxxxx.xxx Site. For the XxxxxXxxxx.xxx and PowerStudents/XxxxxxXxxxx.xxx
Snowball Hub Sites, a plain text email message will be sent. For the XXX.xxx
Snowball Hub Site a plain text and/or HTML based email message will be sent. The
email message may be the same or customized for each Snowball Hub Site upon
mutual agreement of the parties.
**Confidential treatment has been requested with respect to the information
contained within the "[**]" markings. Such marked portions have been omitted
from this filing and have been filed separately with the Securities and Exchange
Commission.
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(c) Termination of Registration Services. At any time, xxxxxxxxx.xxx
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may elect to terminate its obligation to pay for, and Snowball's obligation to
provide, registration services pursuant to this Section 2.1, effective [**]
from the date on which xxxxxxxxx.xxx provides written notice of
termination of such registration services.
2.2 "My Page" Integration.
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(a) New Users. Snowball will integrate content and/or links, the
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extent and placement of which Snowball shall determine with xxxxxxxxx.xxx's
approval, which approval shall not be unreasonably withheld, from the
xxxxxxxxx.xxx Site into Snowball's customizable "My Page" sections developed for
new users. Snowball will work with xxxxxxxxx.xxx to find ways to provide custom
content and/or product offerings from the xxxxxxxxx.xxx Site to Snowball Network
users.
(b) Existing Users. For existing registered Snowball Network users,
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Snowball will include a xxxxxxxxx.xxx listing in the "My Page" profile update
page, permitting users to choose to receive content and/or product offerings
from the xxxxxxxxx.xxx Site.
2.3 Integrated Content. The parties will work together to integrate
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xxxxxxxxx.xxx branding and links into relevant health content pages on Snowball
Hub Sites, subject, in all cases, to Snowball's final editorial approval, which
approval shall not be unreasonably withheld. Snowball will work to ensure that
its editors are available to discuss such integration with xxxxxxxxx.xxx
representatives within a reasonable time after execution of this Agreement.
Snowball will credit xxxxxxxxx.xxx for any content that is integrated into a
Snowball Network site with "sponsored by" or a similar attribution and will
include an appropriate notice identifying xxxxxxxxx.xxx's intellectual property
rights in such content. If Snowball, at its sole discretion, offers
xxxxxxxxx.xxx an opportunity to integrate content into an Affiliate site, such
integration shall be pursuant to substantially the same terms as for integration
of content on Snowball Hub Sites.
2.4 Co-Branded Commerce Pages.
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(a) Snowball and xxxxxxxxx.xxx will work together to develop co-
branded health, pharmacy, personal care, and wellness stores ("Commerce Pages")
to be hosted and served by Snowball on each Snowball Hub Site when Snowball
implements e-commerce functionalities on each Snowball Hub Site. The Commerce
Pages will each include co-branded pages and will feature health, pharmacy,
personal care, beauty, subject to the limitations set forth in Section 2.4(c),
and wellness products that can be purchased in the xxxxxxxxx.xxx Site.
xxxxxxxxx.xxx will be solely responsible for pricing and fulfilling orders
placed with such Commerce Pages. xxxxxxxxx.xxx acknowledges that the e-commerce
section of the XxxxxXxxxxxxx.xxx Snowball Hub Site is not expected to launch
until [**] at the earliest and that the e-commerce section of the IGN Snowball
Hub Site is not expected to launch until [**] at the earliest.
(b) Snowball will work to develop custom content for the Commerce
Pages, which may include such items as Editor's Picks, Polls, and Message
Boards. Snowball editors
**Confidential treatment has been requested with respect to the information
contained within the "[**]" markings. Such marked portions have been omitted
from this filing and have been filed separately with the Securities and Exchange
Commission.
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shall determine the look and feel, content, and specific functionalities of the
Commerce Pages subject to the approval of xxxxxxxxx.xxx, which approval will not
be unreasonably withheld. xxxxxxxxx.xxx will be permitted to change and replace
products within the Commerce Pages on an "as needed" basis; provided that,
xxxxxxxxx.xxx shall give Snowball seventy-two (72) hour notification of the need
for any such change; however, Snowball will be sensitive to specific situations
in which a twenty-four (24) hour response may be requested.
(c) With respect to the XxxxxXxxxx.xxx Snowball Hub Site, in the
ChickShops storefront and the home pages of XxxxxXxxxx.xxx and XxxxxXxxxx.xxx,
xxxxxxxxx.xxx shall not promote the sale or give-away of any Prestige Beauty
Products (as defined herein), shall not promote or link to any site whose
primary business is the promotion or sale of Prestige Beauty Products, and shall
not promote or link to any page on any site that primarily promotes and sells
Prestige Beauty Products; however, xxxxxxxxx.xxx may promote the sale or give-
away of Prestige Beauty Products on any other area of the XxxxxXxxxx.xxx
Snowball Hub Site and on any other portion of the Snowball Network. For
purposes of this Agreement, "Prestige Beauty Products" means color cosmetics and
treatment products typically marketed offline through high-end department stores
and boutiques, including but not limited to: (i) high-end department store
quality brands such as Xxxxx Xxxxxx, Lancome, Clinique, Prescriptives, Xxxxx
Xxxxx, Xxxxx XxXxxxx, and MAC; and (ii) boutique brands, such as Xxxx Xxx,
Bloom, Dirty Girl, Get Fresh, Jacqua Girls, Nars, Philosophy, Stila, Xxxx and
Xxxx, and Zihr. For purposes of clarification, Prestige Beauty Products does
not include "mass marketed" brands, such as CoverGirl, Max Factor, Revlon,
Almay, L'Oreal, and United Colors of Benetton. At least one product featured by
xxxxxxxxx.xxx in the ChickShops must be a non-beauty product, that is, a health,
pharmacy, personal care or wellness product.
2.5 Impressions and Links.
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(a) Delivery and Format. Snowball will deliver on Snowball Network
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pages the impressions and links set forth in the schedule in Exhibit D. For
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those impressions for which a set number of impressions are guaranteed to be
delivered in a month ("Guaranteed Impressions"), if for any month such number of
impressions is not delivered, then, subject to the following sentence, as
Snowball's sole obligation, and xxxxxxxxx.xxx's sole and exclusive remedy,
Snowball will deliver any deficiency such that xxxxxxxxx.xxx receives [**] by
the end of the term of this Agreement, and [**] by no later than ninety (90)
days following the termination or expiration of this Agreement. In the event
that Snowball has not delivered all Guaranteed Impressions by the end of the
ninety (90) day period, xxxxxxxxx.xxx, as its sole and exclusive remedy, may, at
its discretion, extend the period for delivery for an additional thirty (30) day
period or terminate this Agreement and receive a pro rata refund pursuant to
Exhibit C of any Minimum Guaranteed Payments made; provided, that, in no event
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will xxxxxxxxx.xxx's termination of this Agreement pursuant to the terms hereof
be deemed a termination for breach. All Portal and Navigation Bar Links (as
defined in Exhibit D) shall display the xxxxxxxxx.xxx Xxxx or such other text or
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image as Snowball determines, subject to xxxxxxxxx.xxx's reasonable approval,
and shall link to the xxxxxxxxx.xxx Site or to the Commerce Pages. All other
links and impressions shall display the xxxxxxxxx.xxx Xxxx or the
**Confidential treatment has been requested with respect to the information
contained within the "[**]" markings. Such marked portions have been omitted
from this filing and have been filed separately with the Securities and Exchange
Commission.
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Xxxx of a wholly-owned subsidiary of xxxxxxxxx.xxx, and shall link to the
xxxxxxxxx.xxx Site, the Commerce Pages, or the page of a wholly-owned subsidiary
of drugstore, subject to the limitations on linking and promotions set forth in
Section 2.4(c).
(b) Distribution Check Points. Within a reasonable time after the
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Effective Date, the parties will mutually agree upon a set of reasonable monthly
checkpoints to be used to track the distribution of impressions.
(c) Distribution Review. The parties agree and acknowledge that the
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intent of this Agreement is to promote xxxxxxxxx.xxx on the Snowball Network as
a whole. If after two (2) months following the Effective Date, the distribution
of impressions set forth in Exhibit D is not satisfactory to xxxxxxxxx.xxx,
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xxxxxxxxx.xxx may, upon reasonable written notice to Snowball, modify the
distribution of impressions. xxxxxxxxx.xxx may request changes in the
distribution of impressions by impression target, type of impression, or
distribution across the Snowball Network. Snowball will make reasonable efforts
to implement the revised schedule; provided that, xxxxxxxxx.xxx acknowledges
that inventory constraints may limit Snowball's ability to shift more than
fifteen percent (15%) of the total impressions in any given month; and provided
further that, Snowball will shift impressions only to the extent that the
revised schedule is commercially reasonable. On forty-eight (48) hour notice,
xxxxxxxxx.xxx may require Snowball to shift all impressions away from an
Affiliate deemed, at xxxxxxxxx.xxx's discretion, incompatible with the
xxxxxxxxx.xxx marketing and advertising strategy. Snowball, in its reasonable
discretion, will shift such impressions to other Affiliates, the Snowball Hub
Sites, or some combination of Affiliates and Snowball Hub Sites.
2.6 Implementation Management
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(a) Appointment of a Client Services Team. Snowball will assign a
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Client Services Team, consisting of an Account Manager and a Coordinator, to
monitor and maximize use of xxxxxxxxx.xxx's content and services by Snowball
Network users.
(b) Progress Review. On a periodic basis to be mutually agreed by
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the parties, Snowball and xxxxxxxxx.xxx will meet, in person, telephonically, or
by electronic means, to discuss progress in attaining the purposes of this
Agreement and to discuss concerns about the implementation of the Agreement.
3. Additional Marketing Opportunities.
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3.1 Snowball Promotions. Snowball will work to provide xxxxxxxxx.xxx with
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a first right of negotiation for any significant Snowball on-line and off-line
marketing programs and promotional events that the parties mutually agree are
related to the xxxxxxxxx.xxx demographic market for health, pharmacy, personal
care, and wellness products. Accordingly, Snowball will provide xxxxxxxxx.xxx
with notice reasonable under the circumstances of such pending programs and
events. xxxxxxxxx.xxx shall have thirty (30) days from receipt of such notice
to give Snowball notice of its intent to exercise its right of first
negotiation; provided that, if Snowball's participation in such programs and
events is conditioned on notice to a third-party that would require Snowball to
respond to that third party in a period of time such that the above-response
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period for xxxxxxxxx.xxx would be unreasonable, Snowball shall require
xxxxxxxxx.xxx to respond in such shorter period of time as would be reasonable
under such circumstances. If xxxxxxxxx.xxx exercises its right under this
provision, the parties will negotiate in good faith to provide xxxxxxxxx.xxx the
opportunity to participate in such programs and events.
3.2 Press Releases. Each party agrees to submit to the other all
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publicity matters wherein such party's name or proprietary marks are mentioned
or language is used from which the connection to the other party or its names
therein may be inferred or implied. Each party further agrees not to publish or
use such publicity without prior written approval of the other party. Within
thirty (30) days of the Effective Date, the parties will distribute a mutually
agreeable press release announcing the relationship between Snowball and
xxxxxxxxx.xxx.
3.3 Product Give-Aways. Snowball agrees to provide xxxxxxxxx.xxx with an
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opportunity, at times determined by Snowball, to include a sample product or
collateral material branded with the xxxxxxxxx.xxx Xxxx and reasonably
acceptable to Snowball in [**] ChickShops purchase packages.
4. Compensation.
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4.1 Payment Terms. xxxxxxxxx.xxx will pay to Snowball the amounts
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specified in Exhibit C in accordance with that schedule and the terms and
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conditions set forth therein. Payments not made when due will bear interest at
the rate of [**] on the unpaid balance, or the highest
rate permitted by applicable laws, whichever is lower. Payments will be made in
U.S. Dollars.
4.2 Taxes. All amounts payable under this Agreement are exclusive of all
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sales, use, value-added, withholding, and other taxes and duties. xxxxxxxxx.xxx
will pay all taxes and duties assessed in connection with this Agreement and its
performance by any authority within or outside of the U.S., except for taxes
payable on Snowball's net income. Snowball will be promptly reimbursed by
xxxxxxxxx.xxx for any and all taxes or duties that Snowball may be required to
pay in connection with this Agreement or its performance.
4.3 Records and Audit Rights.
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(a) Snowball Audit Rights. xxxxxxxxx.xxx will keep all records
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relating to all purchasing data relevant to this Agreement for a period of three
(3) years after such sale/impression record period. An independent auditor
selected by Snowball and reasonably acceptable to xxxxxxxxx.xxx may, no more
than once per year and upon at least five (5) business days notice, inspect such
records during normal business hours. If, upon performing such audit, it is
determined that xxxxxxxxx.xxx has underpaid Snowball by an amount greater than
five percent (5%) of the payments due Snowball in the period being audited,
xxxxxxxxx.xxx will bear all reasonable expenses and costs of such audit in
addition to its obligation to make full payment under this section.
(b) xxxxxxxxx.xxx Audit Rights. xxxxxxxxx.xxx shall have the right to
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audit Snowball's impressions records to ensure delivery of the Guaranteed
Impressions as specified
**Confidential treatment has been requested with respect to the information
contained within the "[**]" markings. Such marked portions have been omitted
from this filing and have been filed separately with the Securities and Exchange
Commission.
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herein. An independent auditor selected by xxxxxxxxx.xxx and reasonably
acceptable to Snowball may, no more than twice per year and upon at least five
(5) business days notice, inspect such records during normal business hours at
Snowball's corporate office. If, upon performing such audit, it is determined
that Snowball has underdelivered its Guaranteed Impressions commitment for such
period by 30% or more, then as Snowball's sole obligation, and xxxxxxxxx.xxx's
sole and exclusive remedy, Snowball will deliver any deficiency such that
xxxxxxxxx.xxx receives all such Guaranteed Impressions for the audit period.
4.4 Reports. During the term of the Agreement, xxxxxxxxx.xxx shall
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provide monthly reports to Snowball setting forth all click-through rates, the
number of New Customers (as defined herein), and the number of repeat purchases
made by New Customers from xxxxxxxxx.xxx. Such reports shall be due no later
than thirty (30) days after the end of each month.
5. Licenses, Other Proprietary Rights and Related Matters.
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5.1 Content License. xxxxxxxxx.xxx hereby grants to Snowball a limited,
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royalty-free, nonexclusive, nontransferable license to copy, distribute, and
publicly display on the Snowball Network content from the xxxxxxxxx.xxx Site,
and to sublicense such rights to Affiliates (under the same or more restrictive
terms and conditions as stated herein), solely to promote xxxxxxxxx.xxx and the
xxxxxxxxx.xxx Site and otherwise perform this Agreement. Snowball may reformat
and edit xxxxxxxxx.xxx content for the purpose of incorporating such content
into the Snowball Network; provided that Snowball first secures xxxxxxxxx.xxx's
express written approval for edits, which approval shall not be unreasonably
withheld.
5.2 xxxxxxxxx.xxx Trademark License. Subject to the terms and conditions
-------------------------------
of this Agreement, xxxxxxxxx.xxx hereby grants Snowball a limited, royalty-free,
nonexclusive, non-transferable, license, with the right to sublicense such
rights to Affiliates (under the same or more restrictive terms and conditions as
stated herein), to use the xxxxxxxxx.xxx trademarks, service marks and logos
identified in Exhibit B ("xxxxxxxxx.xxx Marks") solely in connection with the
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performance of Snowball's linking, promotional, and branding obligations under
this Agreement. xxxxxxxxx.xxx, in its sole discretion from time to time, may
change the appearance and/or style of the xxxxxxxxx.xxx Marks. Snowball hereby
acknowledges and agrees that: (a) the xxxxxxxxx.xxx Marks are owned solely and
exclusively by xxxxxxxxx.xxx; (b) except as set forth herein, Snowball has no
rights, title or interest in or to the xxxxxxxxx.xxx Marks or to the goodwill
associated with the xxxxxxxxx.xxx Marks; and (c) all use of the xxxxxxxxx.xxx
Marks by Snowball shall inure to the benefit of xxxxxxxxx.xxx. Snowball agrees
not to apply for registration of the xxxxxxxxx.xxx Marks (or any xxxx
confusingly similar thereto) anywhere in the world. Snowball acknowledges and
agrees that the presentation and image of the xxxxxxxxx.xxx Marks should be
uniform and consistent with respect to all services, activities and products
associated with the xxxxxxxxx.xxx Marks. Accordingly, Snowball agrees to use
the xxxxxxxxx.xxx Marks solely in the manner which xxxxxxxxx.xxx shall specify
from time to time in xxxxxxxxx.xxx's sole discretion. All usage by Snowball of
the xxxxxxxxx.xxx Marks shall include the trademark or registered trademark
symbol and shall be in the following form, as appropriate: [xxxxxxxxx.xxx
Xxxx](TM) or [xxxxxxxxx.xxx Xxxx](R).
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5.3 Snowball Trademark License. Subject to the terms and conditions of
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this Agreement, Snowball hereby grants xxxxxxxxx.xxx a limited, royalty-free,
nonexclusive, non-transferable, non-sublicenseable license to use the Snowball
trademarks, service marks and logos identified in Exhibit B ("Snowball Marks")
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solely in connection with the linking, promotional, and branding activities
under this Agreement. Snowball, in its sole discretion from time to time, may
change the appearance and/or style of the Snowball Marks. xxxxxxxxx.xxx hereby
acknowledges and agrees that: (a) the Snowball Marks are owned solely and
exclusively by Snowball; (b) except as set forth herein, xxxxxxxxx.xxx has no
rights, title or interest in or to the Snowball Marks or to the goodwill
associated with the xxxxxxxxx.xxx Marks; and (c) all use of the Snowball Marks
by xxxxxxxxx.xxx shall inure to the benefit of Snowball. xxxxxxxxx.xxx agrees
not to apply for registration of the Snowball Marks (or any xxxx confusingly
similar thereto) anywhere in the world. xxxxxxxxx.xxx acknowledges and agrees
that the presentation and image of the Snowball Marks should be uniform and
consistent with respect to all services, activities and products associated with
the Snowball Marks. Accordingly, xxxxxxxxx.xxx agrees to use the Snowball Marks
solely in the manner that Snowball shall specify from time to time in Snowball's
sole discretion. All usage by xxxxxxxxx.xxx of the Snowball Marks shall include
the trademark or registered trademark symbol and shall be in the following form,
as appropriate: [Xxxxxxxx Xxxx](TM) or [Xxxxxxxx Xxxx](R).
5.4 Ownership. Snowball will retain all right, title and interest in and
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to the Snowball Network and to Snowball content. xxxxxxxxx.xxx will retain all
right, title and interest in and to the xxxxxxxxx.xxx Site, xxxxxxxxx.xxx
products and xxxxxxxxx.xxx content, subject to the express license granted
herein.
5.5 User Data.
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(a) Ownership. Subject to the restrictions in this section and any
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rights to use the applicable data granted under this Agreement, Snowball will
own Snowball Network user registration data, and xxxxxxxxx.xxx will own
xxxxxxxxx.xxx Site user registration data. The parties agree and acknowledge
that user registration data obtained during the simultaneous registration of the
user for both the Snowball Network and xxxxxxxxx.xxx shall be owned separately
by each of the parties.
(b) Treatment of Individually Identifiable User Data. Both parties
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agree that they will not sell, disclose, transfer, or rent any registration data
("User Data") which identifies, or can be used to identify a specific individual
("Individually Identifiable User Data") to any third party or use any
Individually Identifiable User Data on behalf of any third party, without the
express permission of the applicable user specifically approving such use. Both
parties further agree that they will only use Individually Identifiable User
Data themselves in accordance with their respective terms of use and privacy
policies (as amended from time to time); provided that, xxxxxxxxx.xxx's privacy
policy shall be at least as restrictive as the Snowball Network policy. In
those cases where permission for disclosure of Individually Identifiable User
Data has been obtained from the applicable user, both parties shall use all
reasonable efforts to implement an "opt out" feature on its own behalf, and
include and enforce through its agreements with third parties a requirement for
the inclusion of an "opt out" feature in all e-mail communications generated by,
or on behalf of, third party users of the Individually Identifiable User Data.
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(c) Aggregate Data. Notwithstanding the restrictions above, the
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parties retain the right to use, sell, disclose, transfer, or rent any User Data
as long as such User Data is in an aggregate form that does not include any
Individually Identifiable User Data.
5.6 Control of Web Sites. Each party retains sole right and control over
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the programming, content (including without limitation placement thereof), and
conduct of transactions over its respective web sites. Each party, in its
discretion, periodically may redesign or modify the organization, content,
design, "look and feel," navigation, and features of its web site. Without
limiting the generality of the foregoing, Snowball shall have the right, upon
written notice, to reject any content provided by xxxxxxxxx.xxx if such content
fails to comply with Snowball's reasonable requirements or is otherwise
inappropriate for the users of the Snowball Network. If Snowball intends to
eliminate, modify or otherwise redesign any area on the Snowball Hub Sites and
if Snowball determines in its reasonable discretion that such change will
materially affect xxxxxxxxx.xxx's rights hereunder, Snowball shall notify
xxxxxxxxx.xxx of such change and the parties will mutually agree upon a
reasonable alternative.
5.7 Site Information. xxxxxxxxx.xxx will provide Snowball with any
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information reasonably required to implement links from the Snowball Network to
the xxxxxxxxx.xxx site. Each party will give the other party reasonable advance
notice in the event it changes its universal record locator (URL) for its site.
6. Confidential Information.
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6.1 Obligations. Each party ("Receiving Party") agrees to treat as
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confidential all proprietary information disclosed to it by the other party
("Disclosing Party") including, but not limited to, marketing information,
customer data, any data described in Section 5.5 above, and the terms of this
Agreement ("Confidential Information"). Receiving Party agrees not to publish
or disclose the Disclosing Party's Confidential Information to others except to
those employees and subcontractors to whom disclosure is necessary in order to
carry out the purposes of this Agreement. All tangible materials embodying such
Confidential Information will remain the sole property of Disclosing Party and
will be delivered to Disclosing Party by Receiving Party upon Disclosing Party's
request. Receiving Party will inform all its employees and subcontractors who
receive Confidential Information of the confidential nature of such Confidential
Information and of their obligation to keep same confidential and not to use it
other than as permitted hereunder.
6.2 Exceptions. Neither party will have any obligation with respect to
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any Confidential Information which: (a) was rightfully known to Receiving Party
prior to receipt of such Confidential Information from Disclosing Party; (b) is
lawfully obtained by Receiving Party from a third party under no obligation of
confidentiality; (c) is or becomes generally known or available without any act
or failure to act by Receiving Party; or (d) is developed independently by
Receiving Party. The Receiving Party may disclose the Confidential Information
of the Disclosing Party if required by court order or by any other statutory or
regulatory requirement; provided that, the Receiving Party has given the
Disclosing Party reasonable notice of such order
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or requirement to allow the Disclosing Party to contest or limit the scope of
such required disclosure (including application for a protective order).
7. Term and Termination.
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7.1 Term. This Agreement will commence on the Effective Date and remain
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in effect for [**], unless terminated earlier pursuant to this Section 7.
Commencing [**] prior to expiration of the Agreement, xxxxxxxxx.xxx shall have a
period of [**] in which it may give written notice to Snowball of its desire to
renew this Agreement for [**] or as otherwise mutually agreed by the parties. In
the event that during that [**] notice period, xxxxxxxxx.xxx provides such
notice, the parties shall negotiate in good faith to renew the Agreement,
subject to any changes to the terms and conditions required by one or more of
the parties, and for [**] after receipt of such notice, Snowball will not
negotiate with any xxxxxxxxx.xxx Competitor to replace xxxxxxxxx.xxx upon
termination of this Agreement. If during the [**] notice period xxxxxxxxx.xxx
does not provide notice of its desire to renew, or if within the [**]
negotiation period the parties are unable to reach agreement on the renewal
terms, Snowball will be free to negotiate a replacement agreement with another
party.
7.2 Termination for Benchmark Performance Failure. Snowball Network users
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who visit the xxxxxxxxx.xxx Site via a link from the Snowball Network or via a
link from an email message sent out by the Snowball Network and who purchase one
or more products from xxxxxxxxx.xxx, and who have not previously made a purchase
from xxxxxxxxx.xxx, shall be referred to herein as "New Customers." If at the
end of [**] from the Effective Date less than [**] Snowball Network users have
become New Customers, xxxxxxxxx.xxx shall have the right to terminate the
Agreement on written notice to Snowball; provided that such notice is given
during the [**] period following the beginning of [**] after the Effective Date.
7.3 Termination for Breach or Insolvency. Either party may terminate this
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Agreement at any time prior to the expiration of its stated term in the event
that (a) the other party materially breaches any term or condition of this
Agreement and fails to cure such breach within [**] of written notice; or (b)
either party becomes the subject of a voluntary petition in bankruptcy or any
voluntary proceeding relating to insolvency, receivership, liquidation, or
composition for the benefit of creditors; or (c) either party becomes the
subject of an involuntary petition in bankruptcy or any involuntary proceeding
relating to insolvency, receivership, liquidation, or composition for the
benefit of creditors, if such petition or proceeding is not dismissed within
[**] of filing.
7.4 Effect of Termination.
---------------------
(a) In the event of a termination by xxxxxxxxx.xxx under Section
2.5(a) or 7.2, xxxxxxxxx.xxx shall receive, pursuant to Exhibit C, a pro rata
----------
refund of any Minimum Guaranteed Payment and, except as specified in subsection
(b), shall have no further payment liability hereunder.
**Confidential treatment has been requested with respect to the information
contained within the "[**]" markings. Such marked portions have been omitted
from this filing and have been filed separately with the Securities and Exchange
Commission.
10
(b) xxxxxxxxx.xxx's payment obligations accrued and payable as of the
date of termination, except those payment obligations disputed in good faith, as
well as the following provisions shall survive any termination of this
Agreement: Section 4.2 (Taxes), Section 5.4 (Ownership), Section 5.5 (User
Data), Section 5.6 (Control of Web Sites), Section 6 (Confidential
Information), Section 7.4 (Effect of Termination), Section 8 (Warranties and
Disclaimers), Section 9 (Limitation of Liability), Section 10 (Indemnification)
and Section 11 (General), with the exception of subsection 11.9.
(c) If Snowball is obligated to make good on undelivered Guaranteed
Impressions, the following provisions additionally shall survive termination for
the purpose of governing delivery of the underdelivered Guaranteed Impressions
until such time as the underdelivered Guaranteed Impressions have been
delivered: Section 2.5(a) (Impressions and Links), Section 3.2 (Press
Releases), Section 4.1 (Payment Terms), Section 4.3 (Records and Audit Rights),
Section 4.4 (Reports), Section 5.1 (Content License), Section 5.2 (xxxxxxxxx.xxx
Trademark License), Section 5.7 (Site Information), and Section 11.9
(Consolidated URL Listing).
(d) Within five (5) business days after termination of this
Agreement, or after all of Snowball's obligations to make good on underdelivered
Guaranteed Impressions have been fulfilled, if any, all links, buttons, and
banners will be removed and disabled, and any Confidential Information or other
materials where the party's name or proprietary marks are mentioned or language
is used from which the connection of the other party or its names therein may be
inferred or implied.
8. Warranties and Disclaimers.
--------------------------
8.1 Warranties. Each party represents, warrants and covenants that it has
-----------
the power and authority to enter into and perform its obligations under this
Agreement.
8.2 Disclaimer. EXCEPT AS PROVIDED IN SECTION 8.1, EACH PARTY DISCLAIMS
-----------
ALL OTHER WARRANTIES, EITHER EXPRESS, IMPLIED OR STATUTORY, INCLUDING BUT NOT
LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, AND NONINFRINGEMENT.
9. Limitation of Liability.
-----------------------
EXCEPT WITH RESPECT TO ITS OBLIGATIONS UNDER SECTION 10, NEITHER PARTY WILL
BE LIABLE TO THE OTHER PARTY FOR ANY INCIDENTAL, INDIRECT, SPECIAL, OR
CONSEQUENTIAL DAMAGES, OR ANY LOSS OF REVENUE, PROFITS, OR DATA, ARISING IN
CONNECTION WITH THIS AGREEMENT, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES. IN NO EVENT WILL SNOWBALL'S AGGREGATE LIABILITY
HEREUNDER, UNDER ANY THEORY OF LAW, EXCEDE THE AMOUNTS ACTUALLY RECEIVED BY
SNOWBALL FROM XXXXXXXXX.XXX HEREUNDER IN THE [**] PERIOD IMMEDIATELY PRECEDING
THE EVENT WHICH GAVE RISE TO THE CLAIM FOR
**Confidential treatment has been requested with respect to the information
contained within the "[**]" markings. Such marked portions have been omitted
from this filing and have been filed separately with the Securities and Exchange
Commission.
11
DAMAGES. IN NO EVENT WILL XXXXXXXXX.XXX'S AGGREGATE LIABILITY HEREUNDER, UNDER
ANY THEORY OF LAW, EXCEDE THE AMOUNTS ACTUALLY RECEIVED BY SNOWBALL FROM
XXXXXXXXX.XXX HEREUNDER PLUS ANY AMOUNTS ACCRUED AND PAYABLE BY XXXXXXXXX.XXX
HEREUNDER IN THE [**] PERIOD IMMEDIATELY PRECEDING THE EVENT WHICH GAVE RISE TO
THE CLAIM FOR DAMAGES.
10. Indemnification.
---------------
10.1 Snowball's Obligations. Snowball hereby agrees to defend, indemnify
----------------------
and hold harmless xxxxxxxxx.xxx and its subsidiaries, and their directors,
officers, employees, and agents against any and all claims, actions, losses,
damages, costs, and expenses (including reasonable attorneys' fees) (any or all
of the foregoing hereinafter referred to as "Losses") to the extent they arise
out of or are based on, other than those claims described in Section 10.2: (i)
any claim related to the Snowball Network, including claims that such sites have
not been operated in compliance with applicable federal, state, or local laws of
the United States or that the Snowball Marks or content infringe the copyrights,
trademarks, service marks or any other proprietary right of any third party, or
(ii) any claim related to Snowball's acts or omissions with respect to any
customer. Snowball's obligations under this Section are hereby expressly
conditioned on the following: (a) xxxxxxxxx.xxx provides Snowball with prompt
notice of any such claim; (b) xxxxxxxxx.xxx permits Snowball to assume and
control the defense of such action, with counsel chosen by Snowball (who will be
reasonably acceptable to xxxxxxxxx.xxx); and (c) xxxxxxxxx.xxx provides Snowball
with any information or assistance requested by Snowball, at Snowball's expense.
10.2 xxxxxxxxx.xxx's Obligations. xxxxxxxxx.xxx hereby agrees to defend,
---------------------------
indemnify and hold harmless Snowball and its subsidiaries, and their directors,
officers, employees, and agents against any and all Losses to the extent they
arise out of or are based on, other than those claims described in Section 10.1:
(i) any claim related to the xxxxxxxxx.xxx Site, including claims that such site
has not been operated in compliance with applicable federal, state, or local
laws of the United States or that the xxxxxxxxx.xxx Marks or content infringe
the copyrights, trademarks, service marks or any other proprietary right of any
third party: (ii) any products made available by xxxxxxxxx.xxx on any Health and
Wellness Store or the xxxxxxxxx.xxx Site,; (iii) any content, information or
other material provided to Snowball by xxxxxxxxx.xxx; or (iv) xxxxxxxxx.xxx's
activities (or omissions) with respect to any customer. xxxxxxxxx.xxx's
obligations under this Section are hereby expressly conditioned on the
following: (a) Snowball provides xxxxxxxxx.xxx with prompt notice of any such
claim; (b) Snowball permits xxxxxxxxx.xxx to assume and control the defense of
such action, with counsel chosen by xxxxxxxxx.xxx (who will be reasonably
acceptable to Snowball); and (c) Snowball provides xxxxxxxxx.xxx with any
information or assistance requested by xxxxxxxxx.xxx, at xxxxxxxxx.xxx's
expense.
11. General.
-------
11.1 Waivers/Modifications. Any waiver modification or amendment to any
---------------------
provision of this Agreement will be effective only if in writing and executed by
both parties. The waiver
**Confidential treatment has been requested with respect to the information
contained within the "[**]" markings. Such marked portions have been omitted
from this filing and have been filed separately with the Securities and Exchange
Commission.
12
by either party of any default or breach of this Agreement will not constitute a
waiver of any other or subsequent default or breach.
11.2 Notices. All notices required to be given under this Agreement will
-------
be deemed given when delivered personally or sent by confirmed facsimile or U.S.
certified mail, return receipt requested, to the address shown in the preamble
above, or as may otherwise be specified by either party to the other in writing.
11.3 Severability. If any provision of this Agreement is found illegal or
------------
unenforceable, it will be enforced to the maximum extent permissible, and the
legality and enforceability of the other provisions of this Agreement will
remain in full force and effect.
11.4 Governing Law/Attorney's Fees. This Agreement will be governed by
-----------------------------
and construed in accordance with the laws of the State of California applicable
to agreements entered into, and to be performed entirely, within California
between California residents. In the event that any action or proceeding is
brought in connection with this Agreement, the prevailing party in such action
or proceeding shall be entitled to recover its costs and reasonable attorneys'
fees.
11.5 No Partnership. The relationship of the parties hereto is solely
--------------
that of independent contractors, and not partners, joint venturers or agents.
Neither party has any authority to bind the other in connection with this
Agreement.
11.6 Entire Agreement. This Agreement, including any exhibits attached
----------------
hereto, is the complete and exclusive agreement between the parties with respect
to the subject matter hereof, and supersedes and replaces any and all prior or
contemporaneous agreements regarding such subject matter.
11.7 Force Majeure. Neither party will be liable to the other party as a
-------------
result of its failure to perform any obligation or duty under this Agreement,
other than the obligation to pay money, to the extent that such failure is cause
by flood, war, riot, civil insurrection, labor or material shortages, failure of
contractors to perform their obligations, or other events that are not
reasonably foreseeable or are beyond the reasonable control of the party.
11.8 No Assignment. Neither party may assign this Agreement without the
-------------
other party's written consent except in the event of a reorganization, merger,
consolidation or sale of all or substantially all of its assets. Any assignment
in violation of this Section shall be null and void.
11.9 Consolidated URL Listing. xxxxxxxxx.xxx hereby grants Snowball
------------------------
permission to include all of the URLs related to the pages served to health,
pharmacy, personal care, and wellness customers through the Snowball Network
together with other Snowball-related URLs in consolidated listings assembled by
third-party measurement companies, including but not limited to Media Metrix,
NetRatings or any similar measuring service selected by Snowball for measurement
of traffic on the Snowball Network. xxxxxxxxx.xxx agrees that the rights
granted under this section are exclusive to Snowball and that xxxxxxxxx.xxx will
not grant the same or similar rights to any other party.
13
In Witness Whereof, the parties have entered into this Agreement as of the
Effective Date.
xxxxxxxxx.xxx, inc. XXXXXXXX.XXX, INC.
By: /s/ Xxxxx Xxxxxxx By: /s/ Xxxxx X. Xxxxxxx
Name: Xxxxx Xxxxxxx Name: Xxxxx X. Xxxxxxx
Title: CEO Title: COO/CFO
14
EXHIBIT A
xxxxxxxxx.xxx COMPETITORS
-------------------------
(including Internet and non-Internet components of such companies):
-------------------------------------------------------------------
[**]
**Confidential treatment has been requested with respect to the information
contained within the "[**]" markings. Such marked portions have been omitted
from this filing and have been filed separately with the Securities and Exchange
Commission.
15
EXHIBIT B
MARKS
1. xxxxxxxxx.xxx Marks
-------------------
2. Snowball Marks
--------------
16
EXHIBIT C
PAYMENT
1. Minimum Guaranteed Payments. xxxxxxxxx.xxx shall pay Snowball [**] in [**]
---------------------------
installments pursuant to the following schedule:
Payment Due Date Payment Amount
[**] [**]
Should production considerations delay the implementation of portions of
the program established under this Agreement, Snowball will work with
xxxxxxxxx.xxx to modify the [**] payment schedule to reflect the elements of the
program that are "live" on the Snowball Network; provided that, the total paid
over [**] shall be equal to [**].
In the event that xxxxxxxxx.xxx is entitled to a pro rata refund under this
Agreement of its Minimum Guaranteed Payments, such refund shall be [**] per
thousand Guaranteed Impressions not delivered during the relevant delivery
period.
2. Additional Payments. xxxxxxxxx.xxx shall pay Snowball the additional
-------------------
amounts shown below. Such payments are due monthly no later than thirty days
after the end of each month.
(a) New Customers. For each New Customer [**] Customers, xxxxxxxxx.xxx
-------------
agrees to pay a fee of [**]. (There is no fee for [**].
(b) Registration Fees. For each registrant who registers for the
------------------
xxxxxxxxx.xxx during the Snowball Network registration process [**],
xxxxxxxxx.xxx agrees to pay Snowball the following amounts:
Number of Registrants Amount Per Registrant
[**] [**]
**Confidential treatment has been requested with respect to the information
contained within the "[**]" markings. Such marked portions have been omitted
from this filing and have been filed separately with the Securities and Exchange
Commission.
17
[**] [**]
If xxxxxxxxx.xxx terminates registration services pursuant to Section 2.1,
payment shall be due from xxxxxxxxx.xxx to Snowball for registrations for the
xxxxxxxxx.xxx Site for the dates prior to, but not including, the effective date
of such termination.
**Confidential treatment has been requested with respect to the information
contained within the "[**]" markings. Such marked portions have been omitted
from this filing and have been filed separately with the Securities and Exchange
Commission.
18
EXHIBIT D
IMPRESSIONS AND LINKS
-----------------------------------------------------------------------------------------------------------------------------
Impression/Link Number of Type of Distribution of Impressions Across the Snowball Network
Target Impressions/Links Impression/Link
-----------------------------------------------------------------------------------------------------------------------------
XxxxxXxxxx.xxx XXX.xxx Xxxxxxxxxxxxx.xxx/ Affiliates
XxxxxxXxxxx.xxx
-----------------------------------------------------------------------------------------------------------------------------
Commerce Pages [**] Guaranteed Banner Impressions [**] [**] [**] [**]
Impressions per month
-----------------------------------------------------------------------------------------------------------------------------
Commerce Pages [**] Guaranteed Button Impressions [**] [**] [**] [**]
Impressions per month
-----------------------------------------------------------------------------------------------------------------------------
xxxxxxxxx.xxx Site [**] Guaranteed Banner or Button [**] [**] [**] [**]
or other site Impressions per month Impressions, at
owned by Snowball's option
xxxxxxxxx.xxx
-----------------------------------------------------------------------------------------------------------------------------
Commerce Pages or [**] per month Portal Link [**] [**] [**] [**]
xxxxxxxxx.xxx Site
-----------------------------------------------------------------------------------------------------------------------------
Commerce Pages or Impressions included Navigation Bar Link [**] [**] [**] [**]
xxxxxxxxx.xxx Site in above Portal Link Impressions
totals
-----------------------------------------------------------------------------------------------------------------------------
xxxxxxxxx.xxx Site [**] Email Advertisement [**] [**] [**] [**]
Guaranteed Impressions
Impressions per month
-----------------------------------------------------------------------------------------------------------------------------
In addition to the above listed impressions, Snowball shall issue a one-
time special e-mail blast to include a promotion of xxxxxxxxx.xxx to the
Snowball Network users on, or reasonably near, the beginning of the seventh
month after the Effective Date. The content of such e-mail shall be developed by
Snowball, subject to xxxxxxxxx.xxx's approval, which approval shall not be
unreasonably withheld.
Banner Impressions shall have an approximate configuration of at least 468
x 60 pixels.
A "Portal Link" means a link on Snowball's "Affiliate Commerce Portal,"
which is to appear on Snowball Affiliate site pages.
A "Navigation Bar Link" means a link incorporated into the navigation bar
on each Snowball Hub Site page that links each Snowball Hub Site page to the
Commerce Pages created for that Snowball Hub Site.
"Email Advertisement" impressions shall be delivered in the form of the
transmittal of a Snowball standard size advertisement within emails sent to
Snowball Network registered users as part of Snowball's email schedule, as
specified to Snowball Network users during registration.
**Confidential treatment has been requested with respect to the information
contained within the "[**]" markings. Such marked portions have been omitted
from this filing and have been filed separately with the Securities and Exchange
Commission.
19
