Exhibit 10.10
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Cyberian Outpost, Inc. has omitted from this Exhibit 10.10 portions of the
Agreement for which Cyberian Outpost, Inc. has requested confidential treatment
from the Securities and Exchange Commission. The portions of the Agreement for
which confidential treatment has been requested are marked with X's in brackets
and such confidential portions have been filed separately with the Securities
and Exchange Commission.
INTERACTIVE MARKETING AGREEMENT
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This Interactive Marketing Agreement (the "Agreement"), is made and entered into
as of December 1, 1997 (the "Effective Date"), by and between America Online,
Inc. ("AOL"), a Delaware corporation, with offices at 00000 XXX Xxx, Xxxxxx,
Xxxxxxxx 00000, and Cyberian Outpost, Inc. (the "Marketing Partner" or "MP"), a
Connecticut corporation, with offices at 00 Xxxxx Xxxx Xxxxxx, X.X. Xxx 000,
Xxxx, Xxxxxxxxxxx 00000 (each a "Party" and collectively the "Parties.")
INTRODUCTION
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AOL and MP each desires to enter into an interactive marketing relationship
whereby AOL will promote the MP Products and the interactive site referred to
(and further defined) herein as the Affiliated MP Site. This relationship is
further described below and is subject to the terms and conditions set forth in
this Agreement. Defined terms used herein but not defined in the body of the
Agreement shall be as defined in Exhibit B attached hereto.
TERMS
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1 PROMOTION, DISTRIBUTION AND MARKETING.
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1.1. AOL Promotion of MP Products and Affiliated MP Site. AOL will provide MP
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with the promotions for the MP Products and Affiliated MP Site described
in Exhibit A attached hereto (the "Promotions"). Subject to MP's
reasonable approval, AOL will have the right to fulfill its promotional
commitments with respect to any of the foregoing by providing MP with
comparable promotional placements in appropriate alternative areas of the
AOL Network. In addition, if AOL is unable to deliver any particular
Promotion, AOL will work with MP to provide MP, as its sole remedy, with
a comparable promotional placement (a "Comparable Placement"). In the
event the Parties are unable to agree on a Comparable Placement, the
Parties shall mutually agree to submit the matter to the Management
Committee as provided in Section 7 hereof. AOL reserves the right to
redesign or modify the organization, structure, "look and feel,"
navigation and other elements of the AOL services at any time. In the
event such modifications materially and adversely affect any specific
Promotion, AOL will work with MP to provide MP, as its sole remedy, with
a comparable promotional placement.
1.2 Impressions. During the Initial Term, AOL will deliver a total of [XXX
XXXXXXX XXXXX XXXXX XXXXX XXXXX XXXXXXX XXXXXX XXXXXXXXX] Impressions
(the "Impressions Commitment") through the Promotions. With respect to
the Impressions Commitment, AOL will not be obligated to provide more
than such target amounts during the Term. In the event that as of the end
of the seventh month of the Term AOL shall not have provided a minimum of
[XXXXX XXXXXX XXXXXXXXXXXX] Impressions through the Promotions (the
"Impressions Minimum"), AOL shall have a reasonable time, not to exceed
sixty (60) days, within which to deliver the Impressions Minimum. If AOL
shall not have delivered the Impressions Minimum within sixty (60) days,
as its sole remedy, [XXXXX XXXXXX XXXXXXXXXXXX]. If there is a shortfall
in Impressions as of the end of the Initial Term (a "Final Shortfall"),
AOL shall elect to either (i) provide MP with advertising placements out
of excess inventory on the AOL Network which have a total value, based on
AOL's then-current advertising rate card, 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)
or (ii) continue to provide MP with certain Promotions designated by AOL
in its sole and absolute discretion until the Impressions Commitment is
fulfilled. If at any time during the Term MP shall not be in compliance
with the provisions of this Agreement, and as a result of such non-
compliance AOL is unable to provide the Impressions required hereunder
during such period of non-compliance, then AOL shall have the right to
reduce the Impressions Commitment, on
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a pro-rata basis, for such period of non-compliance (e.g., if MP has
not complied with the provisions of this Agreement for a period of two
months, then AOL shall reduce the Impressions Commitment by an amount
equal to the product of two (2) times [xxxxxxxxxxx] divided by fourteen
(14)).
1.3 Content of Promotions. The specific Content to be contained within the
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Promotions (including, without limitation, advertising banners and
contextual promotions) (the "Promo Content") will be determined by MP,
subject to (a) AOL's technical limitations, (b) the terms of this
Agreement and (c) AOL's then-applicable policies relating to
advertising and promotions. MP will consistently update the Promo
Content no less than two times per week The Parties will jointly
consult with each other regarding the Promo Content to ensure that it
is designed to maximize performance. Except to the extent expressly
described herein, the specific form, placement, duration and nature of
the Promotions will be as determined by AOL in AOL's reasonable
editorial discretion and in consultation with MP (consistent with the
editorial composition of the applicable screens).
1.4 MP Promotion of AOL. As more fully set forth in Exhibit C attached
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hereto, MP will promote AOL as its preferred Interactive Service and
will promote the availability of the Affiliated MP Site through the AOL
Network. MP will not implement or authorize any promotion on behalf of
any third party which is inconsistent with promotion of AOL as its
preferred Interactive Service.
2 AFFILIATED MP SITE.
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2.1 Customized Site. The Affiliated MP Site shall be an optimized and
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"mirrored" version of MP's main web site containing the specific
Content described in Section 2.2 below for-distribution hereunder
according to AOL specifications and guidelines to ensure that (i)
the functionality and features within the Affiliated MP Site are
optimized for the client software then in use by a majority of AOL
Members and (ii) the forms used in the Affiliated MP Site are
designed and populated in a manner intended to minimize delays
when AOL Users attempt to access such forms.
2.1.1 Specific Requirements.
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(i) MP shall design the Affiliated MP Site to conform,
in all respects, with the provisions of Exhibit E
attached hereto, and
(ii) AOL reserves the right to review the Affiliated MP
Site to ensure that such site is compatible with
AOL's then-available client and host software and the
AOL Network. MP will take all necessary steps to
conform its promotion and sale of the MP Products
through the Affiliated MP Site to the then-existing
technologies identified by AOL which are optimized
for the AOL Network. AOL will be entitled to require
changes to the Content (including, without
limitation, the features or functionality) within any
linked pages of the Affiliated MP Site to the extent
such Content will, in AOL's good faith judgment,
adversely affect any operational aspect of the AOL
Network.
2.1.2 Customization. MP shall customize the Affiliated MP Site
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for AOL Members as follows:
(i) ensure that the Affiliated MP Site is only available
to, and accessible by, AOL Users:
(ii) ensure that AOL Users linking to the Affiliated MP
Site do not receive advertisements, promotions or
links for any other Interactive Service or any entity
reasonably construed to be in competition with AOL or
any other entity otherwise in conflict with AOL
advertising policies and exclusivities; and
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(iii) with the exception of advertising links sold and
implemented pursuant to this Agreement, provide
continuous navigational ability for AOL Users to return
to an agreed-upon point on the AOL Network (for which AOL
shall supply the proper address) from the Affiliated MP
Site (e.g., the point on the AOL Network from which the
Affiliated MP Site is linked), which, at AOL's option,
may be satisfied through the use of a hybrid browser
format.
2.2 Content. MP will provide a comprehensive offering of the MP Products
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and other Content described in Exhibit D-1 attached hereto, through the
Affiliated MP Site. MP will review, delete, edit, create, update and
otherwise manage all Content available on or through the Affiliated MP
Site in accordance with the terms of this Agreement or any amendments
thereto. MP will ensure that the Affiliated MP Site does not in any
respect promote, advertise, market or distribute the products, services
or content of any Interactive Service other than AOL. Except as
otherwise mutually agreed upon by the Parties hereto, the Affiliated MP
Site shall not contain Content (including without limitation, third
party content) relating to anything other than the MP Products listed
on Exhibit D-1 attached hereto.
2.3 Production Work. Except as agreed to in writing by the Parties pursuant
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to the "Production Work" section of the Standard Legal Terms &
Conditions attached hereto as Exhibit F, MP will be responsible for all
production work associated with the Affiliated MP Site, including all
related costs and expenses.
2.4 Hosting; Communications. MP will be responsible for all communications,
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hosting and connectivity costs and expenses associated with the
Affiliated MP Site. In addition, MP will provide all computer,
telephone and other equipment or resources necessary for MP to access
the AOL Network. MP and AOL shall mutually agree upon the most
appropriate means by which MP will connect the MP data center to AOL's
designated data center; provided, however, that in the event the
Parties determine that MP shall utilize a dedicated high speed
connection from the MP data center to AOL's designated data center,
then MP shall be responsible for all costs associated with such high
speed connection.
2.5 Product Offering. MP will ensure that the Affiliated MP Site includes
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all of the MP Products or Content (including, without limitation, any
features, offers, contests, functionality or technology) that are then
made available by or on behalf of MP through any Additional MP 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
cost), and (b) the specific changes in scope, nature and/or offerings
required by such inclusion will be subject to AOL's review and approval
and the terms of this Agreement.
2.6 Pricing and Terms. MP will ensure that: (a) the prices (and any other
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required consideration) for the MP Products in the Affiliated MP Site
will not exceed the prices for the MP Products or any substantially
similar products offered by or on behalf of MP through any Additional
MP Channel; (b) the terms and conditions on which the MP Products or
any other products are offered in or through the Affiliated MP Site
are no less favorable, in any respect, than the terms and conditions
on which the MP Products or any substantially similar products are
offered by or on behalf of MP in or through any Additional MP Channel:
and (c) both the prices and the terms and conditions related to the MP
Products or any other products offered in the Affiliated MP Site are
reasonably competitive in all material respects with the prices and
terms and conditions for the MP Products or substantially similar
products offered by any MP Competitor through any Interactive Site.
2.7 Special Offers. Subject to the provisions of Section 2.5 and 3.3
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hereof, on a regular and
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consistent basis, MP shall promote the following through the
Affiliated MP Site;(a) preferred offerings of computer
hardware and peripherals and packaged software to AOL Members
and (b) other special offers exclusively available to AOL
Members and/or AOL Users ((a) and (b) collectively, the
"Special Offers"). MP 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. The Affiliated MP Site and any
promotions made by MP pursuant to the terms of this Agreement
shall be designed to promote revenue.
2.8 Operating Standards. MP will ensure that the Affiliated MP
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Site and the delivery of the MP Products complies at all times
with the standards set forth in Exhibit E. To the extent site
standards are not established in Exhibit E with respect to any
aspect or portion of the Affiliated MP Site (or the MP
Products or other Content contained therein), MP will provide
such aspect or portion at a level of accuracy, quality,
completeness, and timeliness which meets or exceeds prevailing
standards in the retail computer hardware and peripherals
industry.
2.9 Advertising Sales. Subject to the terms hereof, MP shall have
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the right to sell promotions, advertisements, links, pointers
or similar services or rights through the Affiliated MP Site
("Advertisements"). The specific advertising inventory within
the Affiliated MP Site shall be determined by MP. MP will
provide AOL with quarterly reports providing detailed
information regarding any advertising sales by MP and any
other information relevant to the computation and sharing of
Advertising Revenues derived from the Affiliated MP Site. MP
and AOL shall share the revenues derived from the sale of
Advertisements in the Affiliated MP Site pursuant to Section
4.3 hereof. All Advertisements in the Affiliated MP Site shall
be subject to AOL's then-applicable advertising policies and
existing exclusivities.
3 AOL EXCLUSIVITY OBLIGATIONS.
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3.1 Exclusive Product. With respect to the MP Competitors listed
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below, from and after February 1, 1998, and for the remainder
of the Initial Term, so long as MP is in compliance with all
material terms of this Agreement, MP shall be the exclusive
third party reseller of computer hardware and peripheral
equipment (i.e., CPU's, monitors, mouses, disk drives, modems,
keyboards, printers, and such comparable, additional computer
hardware products directly related to the use of a CPU as may
be mutually agreed upon by the Parties, but specifically
excluding, without limitation, such products as speakers,
video game consoles, joysticks, electronic organizers (or
other Windows CE devices) calculators, pagers and other
similar electronic products and accessories) ("Hardware
Products") promoted on the Exclusive Screens (the "Exclusive
Products"). The MP Competitors shall consist of the third
parties listed on Exhibit H attached hereto. To the extent
that any MP Competitor is not solely a provider of the
Exclusive Products (i.e. it is also engaged in activities
other than providing the Exclusive Product) such exclusivity
shall only apply to the marketing of the Exclusive Product by
such MP Competitor.
3.2 Exceptions. Notwithstanding anything to the contrary contained
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in this Section 3, no provision of this Agreement shall limit
AOL's ability (on or off the AOL Network) to:
(i) advertise Hardware Products sold through the AOL Store
via pop-ups on the AOL Network;
(ii) promote, market or distribute the products of original
equipment manufacturers of computer hardware and peripheral
equipment;
(iii) promote, market or distribute the products of any third
party that markets and/or distributes its products through an
Auction Format or a Retail Club. For the purposes hereof, an
"Auction Format" shall mean a format whereby products are sold
through the
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bidding by one or more individuals or entities on a product or
group of products, and the price of such product or group of
products is determined by the price paid by the highest
bidder, and a "Retail Club" shall mean either (a) a business
which sells a collection of goods or services and derives a
substantial portion of its revenues from subscription fees
paid by its members in order to gain access to such goods,
services or products (e.g.: CUC International), or (b) a
business which initially offers goods or services to its
members at a steep discount in return for a contractual
commitment from such members to purchase a certain number of
goods or services at some future date (e.g.: Columbia Record
Club or BMG Music Club); or
(iv) enter into an arrangement with any third party (which
third party is not principally in the business of providing
the Exclusive Products) for the primary purpose of acquiring
AOL Users whereby such party is allowed to promote or market
products or services to AOL Users that are acquired as a
result of such agreement.
3.3 Packaged Software. During the Term, MP shall have the right to
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promote, market and sell pre-packaged software on the AOL.
Service and XXX.xxx, provided that such prepackaged software
shall not be subject to the exclusivity provisions of Section
3.1.
4 PAYMENTS.
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4.1 Guaranteed Payments.
4.1.1 During the Initial Term, MP shall pay to AOL a
guaranteed payment of Five Million Dollars
(US $5,000,000) as follows:
(i) Two Hundred Thousand Dollars (US $200,000)
upon execution of this Agreement;
(ii) Two Hundred Thousand Dollars (US $200,000)
on January 15, 1998;
(iii) Four Million Dollars (US $4,000,000) upon
the occurrence of the earlier of (i) the
receipt of funds by MP in a debt or equity
financing (or series of related financings)
consummated by MP after the Effective Date
yielding aggregate proceeds to MP of at
least Six Million Dollars (US $6,000,000)
and (ii) March 1, 1998;
(iv) Two Hundred Thousand Dollars (US $200,000)
on April 1, 1998;
(v) Two Hundred Thousand Dollars (US $200,000)
on July 1, 1998 and
(vi) Two Hundred Thousand Dollars (US $200,000)
on October 1, 1998.
4.1.2 During the AOL Renewal Term or the MP Renewal Term,
as the case may be. MP will pay to AOL the guaranteed
payments set forth in Section 6.2.
4.2 Sharing of Transaction Revenues. MP shall pay to AOL an amount
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equal to [xxxxxxxxxxxxxx] of Transaction Revenues until such
time as aggregate Transaction Revenues plus [xxxxxxxxxxxxxxx]
of aggregate Advertising Revenue ("MP Revenues") shall equal
a sum total of [XXXXXXX] (the "Threshold"). During the Initial
Term, from and after the Threshold has been met, MP shall pay
to AOL an amount equal to [xxxxxxxxxxxx] of aggregate
Transaction Revenues. MP will pay all of the foregoing amounts
on a quarterly basis within thirty (30) days of the end of the
quarter in which the applicable Transaction Revenues were
generated.
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4.2.1 Sharing of Transaction Revenues During a Renewal Term pursuant to
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Section 6.2.
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a. During the AOL Renewal Term, MP shall pay to AOL an amount equal
to [XXXXXXXXX XXXXXXXX] of Transaction Revenues until such time as
MP Revenues shall equal a sum total of [XXXXX XXXX XXXXXXX XXXXX
XXXXXXXXXX] (the "AOL Renewal Threshold"). During the AOL Renewal
Term, from and after the AOL Renewal Threshold has been met, MP
shall pay to AOL an amount equal to [XXXX XXXXXXXX] of aggregate
Transaction Revenues. MP will pay all of the foregoing amounts on a
quarterly basis within thirty (30) days of the end of the quarter in
which the applicable Transaction Revenues were generated.
b. During the MP Renewal Term, MP shall pay to AOL an amount equal
to [XXX XXXXXXXXX] of Transaction Revenues until such time as MP
Revenues shall equal a sum total of [XXX XXXXXX XXXXX XXXX XXXXXXX
XXXXXX XX XXXXXXX] (the "MP Renewal Threshold"). During the MP
Renewal Term, from and after the MP Renewal Threshold has been met,
MP shall pay to AOL an amount equal to [XXXX XXXXXXX] of aggregate
Transaction Revenues. MP will pay all of the foregoing amounts on a
quarterly basis within thirty (30) days of the end of the quarter in
which the applicable Transaction Revenues were generated.
4.3 Sharing of Advertising Revenues. MP shall pay to AOL an amount equal to
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[XXXXX XXXXX XXXX] of all Advertising Revenues generated pursuant ot this
Agreement. MP shall pay to AOL all Advertisng Revenues received and owned
to AOL on a quarterly basis within thirty (30) days of the end of the
quarter in which such amounts were generated by MP.
4.4 Alternative Revenue Streams. In the event MP or any of its affiliates (a)
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receives or desires to receive, directly or indirectly, any compensation in
connection with the Affiliated MP Site other than Transaction Revenues or
Advertising Revenues (an "Alternative Revenue Stream"), or (b) desires to
materially alter its current business model (e.g.: a change to an Auction
Format or Retail Club) (an "Alternative Business Model") MP will promptly
inform AOL in writing, and the Parties will negotiate in good faith
regarding whether MP will be allowed to (i) market products producing such
Alternative Revenue Stream through the Affiliated MP Site or (ii) create an
Alternative Business Model, and if so, the equitable portion of revenues
from such Alternative Revenue Stream or Alternative Business Model (if
applicable) that will be shared with AOL (in no event less than the
percentage of Transaction Revenues to be paid to AOL pursuant to this
Section 4). In the event the Parties cannot in good faith reach agreement
regarding such Alternative Revenue Stream or Alternative Business Model
within ten (10) days of AOL's request to negotiate, the Parties shall
mutually agree to submit such dispute to the Management Committee for
resolution in the manner set forth in Section 7 hereof.
4.5 Wired Payments; Late Payments. All payments required under this Section 4
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will be paid in immediately available, non-refundable funds wired to AOL's
account. If (i) the amounts owed pursuant to Section 4.1 are not paid
within five (5) business days of the date when such amounts are due and
payable or (ii) the amounts owed pursuant to Sections 4.2, 4.3 and 4.4 are
not paid within fifteen (15) days of the date when such amounts are due and
payable, then in addition to its other remedies hereunder, AOL shall have
the right to immediately terminate this Agreement. Notwithstanding the
foregoing, after such time as AOL shall have received the payments required
pursuant to Section 4.1.1 (iii) hereof, if the remaining amounts owed
pursuant to Section 4.1 are not paid within five (5) business days of the
date when such amounts are due and payable, then MP shall have an
additional five (5) days within which to make such payment (the "Additional
Payment Period"). If after such time payment shall not have been received
by AOL, then in addition to its other remedies hereunder, AOL shall have
the right to
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immediately terminate this Agreement. MP shall only be
entitled to one Additional Payment Period hereunder; In the
event that MP requires more than one Additional Payment
Period, AOL shall have the right to immediately terminate this
Agreement in addition to any other remedies it may possess
hereunder. All amounts owed hereunder not paid when due and
payable will bear interest from the date such amounts are due
and payable at the prime rate listed in the Wall Street
Journal at such time.
4.6 Auditing Rights. MP will maintain complete, clear and accurate
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records of all expenses, revenues and fees in connection with
the performance of this Agreement. For the sole purpose of
ensuring compliance with this Agreement, AOL will have the
right, at its expense, to direct an independent certified
public accounting firm to conduct a reasonable and necessary
inspection of portions of the books and records of MP which
are relevant to MP's performance pursuant to this Agreement;
provided, however, that AOL shall not have the right to
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perform more than two (2) such audits in any given calendar
year. Any such audit may be conducted after twenty (20)
business days prior written notice.
4.7 Taxes. MP will collect and pay and indemnify and hold AOL
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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.
4.8 Reports; Customer Data.
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4.8.1 Sales Reports. MP will provide AOL with a monthly
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report in a reasonable AOL designated format,
detailing the following activity in such month (and
any other information mutually agreed upon by the
Parties or reasonably required for measuring revenue
activity by MP through the Affiliated MP Site),
subject to MP's technical limitations: (i) summary
sales information by day (date, number of MP
Products, number of orders, total Transaction
Revenues); and (ii) detailed sales information (order
date/time stamp (if technically feasible), purchaser
name and screenname) (the information in clauses (i)
and (ii) are collectively referred to herein as
"Sales Reports"). AOL will be entitled to use the
Sales Reports in its business operations, subject to
the terms of this Agreement and provided that such
Sales Reports are not shared with the AOL Store for
the purpose of marketing products competitive with
the Exclusive Products. More generally, each payment
to be made by MP pursuant to this Section 4 will be
accompanied by a report containing information which
supports the payment, including information
identifying (i) gross Transaction Revenues and an
aggregate accounting of all items deducted or
excluded from gross Transaction Revenues 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.
4.8.2 Fraudulent Transactions. To the extent permitted by
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applicable laws, MP will provide AOL with a report of
any fraudulent order, including the date, screenname
or email address and amount associated with such
order, promptly following MP obtaining knowledge that
the order is, in fact, fraudulent. AOL shall
cooperate with MP in tracking any fraudulent orders.
5 WARRANTS
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5.1 Grant of Warrants. Subject to the receipt by MP of shareholder
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approval, MP hereby grants to AOL warrants (the "Warrants")
representing the right for a ten-year period to purchase Three
Hundred Fifty Five Thousand Seven Hundred and Seven (355,707)
shares of MP common stock, with no par value (the "Common
Stock"), at a price
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per share equal to the lessor of (i) the lowest price per share paid by any
investor or group of investors in any equity financing consummated by MP
which closes on or prior to March 1, 1998 (a "Financing Event"), or (ii)
eight dollars ($8.00) (the "Exercise Price"). Provided, however, that in
connection with clause (i) above, if no Financing Event occurs by Xxxxx 0,
0000, XXX shall receive the lowest price paid by any investor or group of
investors in the next subsequent financing event occurring on or prior to
December 31, 1998.
5.2 Vesting of Warrants. The Warrants granted hereunder shall vest as follows:
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(i) One Hundred Eighteen Thousand Five Hundred Sixty Nine (118,569)
shares on the Effective Date;
(ii) One Hundred Eighteen Thousand Five Hundred Sixty Nine (118,569)
shares immediately upon the renewal of this Agreement pursuant to
Section 6.2 hereof; provided that if a Change of Control in MP shall
occur prior to the renewal of this Agreement, the Warrants provided
pursuant to this clause (ii) shall immediately vest upon such Change
of Control; and
(iii) One Hundred Eighteen Thousand Five Hundred Sixty Nine (118,569)
shares at the earliest of such time as MP shall have generated either
(i) Fifty Million Dollars (US $50,000,000) in Target Revenues during
the Initial Term or (ii) One Hundred Million Dollars ($100,000,000)
in Target Revenue during the Term.
5.3 Terms and Conditions. AOL shall receive shares of Common Stock upon
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exercise of the Warrants granted hereunder. Additionally, six months after
the effective date of the the initial public offering of securities of MP
pursuant to an effective registration statement under the Securities Act of
1993, as amended, AOL shall be entitled to receive Three (3) demand
registration rights, one of which may, at AOL's option, be on Form S-1 and
piggyback registration rights in connection with any shares of stock
received upon exercise of the Warrants. All such registration rights shall
be subject to customary market stand-off and underwriter cutback
provisions. Notwithstanding anything to the contrary contained herein, in
the event MP shall grant registration rights to any investor in the
Financing Event immediately subsequent to the Effective Date that are more
favorable, in any respect, than those granted to AOL hereunder, then MP
shall provide AOL with those right(s) that are more favorable than the
rights of AOL.
5.4 Anti-Dilution Rights. On the date hereof AOL shall have weighted average
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anti-dilution protection rights in the event that MP issues any shares of
Common Stock or any security convertible into or exchangeable for Common
Stock to any person or entity and the consideration per share is less than
the Exercise Price. Notwithstanding the foregoing, in the event, that MP
provides anti-dilution protection rights to any investor in the Financing
Event immediately subsequent to the Effective Date hereof that are more
favorable to such investor, in any respect, than the rights granted to AOL
pursuant to the first sentence of this Section 5.4, MP hereby agrees to
provide AOL with any and all such more favorable anti-dilution protection
rights. All rights granted in this Section 5.4 are supplementary and
additional to any other rights provided herein, including, without
limitation, the rights granted in Section 5.1 hereof.
5.5 Approval; Final Agreement
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(a) The provisions of this Section 5 contain all of the principal and
essential terms and conditions of the Warrants granted to AOL hereunder,
and without limiting the foregoing, within thirty (30) days of the
execution hereof (the "Cutoff Date"), MP shall convene a meeting of its
shareholders and shall use its best efforts to authorize the grant of
Warrants made to AOL hereunder and upon receipt of the requisite approvals,
MP shall
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issue the Warrants granted hereunder and will enter into a
Common Stock Warrant Purchase Agreement which will document
the grant of Warrants hereby made by MP to AOL.
(b) MP hereby acknowledges and agrees that, in the event of a
breach of the provisions of this Section 5.4, AOL would be
irreparably harmed and it would be impossible for AOL to
determine the amount of damages that would result from such
breach, and that accordingly, any remedy at law for any such
breach or threatened breach thereof, would be inadequate,
Accordingly, MP agrees that if the Cutoff Date shall have
occurred and (i) MP shall not have convened a meeting of its
shareholders or (ii) MP shall have received shareholder
approval but the Warrants shall not have been issued to AOL,
the provisions of this Section 5.4 may be specifically
enforced through equitable and injunctive relief in addition
to any other applicable rights or remedies AOL may have, from
any court of competent jurisdiction. MP hereby waives the
claim or defense that a remedy at law would be adequate in
respect to this provision, and agrees to have this Section 5.4
specifically enforced against MP without the necessity of
posting bond or other security, and consents to the entry of
injunctive relief enjoining or restraining any breach or
threatened breach of this Section 5.4.
(c) In the event that MP shall not have obtained shareholder
approval for the grant of Warrants made to AOL hereunder by
the Cutoff Date, then in addition to its other remedies
hereunder, AOL shall have the right to immediately terminate
this Agreement.
6 TERM: RENEWAL: TERMINATION.
--------------------------
6.1 Term. Unless earlier terminated as set forth herein, the
----
initial term of this Agreement will be fourteen (14) months
from the Effective Date (the "Initial Term"). The Initial Term
and either the AOL Renewal Term or the MP Renewal Term, as the
case may be, shall be referred to herein as the "Term".
6.2 Renewal.
-------
6.2.1 One-Year Extension by AOL. In the event MP shall have
-------------------------
generated [xxxxxxxxxxxxxxxxxxxxxxxxxxxxxx] in Target
Revenues during the Initial Term (the "Target
Amount"), AOL may at its option extend the Agreement
for an additional year (an "AOL Renewal Term") by
providing MP with written notice thereof no later
than the later of (i) November 15, 1998 or (ii)
fifteen (15) days after MP shall have generated the
Target Amount (the "Put Notice"). During any such AOL
Renewal Term, MP shall pay to AOL a guaranteed
payment of [xxxxxxxxxxxxxxxxx payable as follows: [x
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxx] In the event that an equity
financing is consummated by MP prior to the
expiration of the Initial Term yielding aggregate
proceeds to MP of at least [xxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxx] the foregoing payments schedule
shall no longer be in effect, and MP shall make the
following payment on an accelerated schedule :[xxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxx]
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6.2.2 One-Year Extension by MP. In the event that (i) MP shall not have
------------------------
generated the Target Amount or (ii) AOL shall have elected not to
renew this Agreement pursuant to the terms of Section 6.2.1, MP may,
no later than September 15, 1998, notify AOL in writing that MP
desires to renew this Agreement for one (1) additional year (the "MP
Renewal Term"). During the MP Renewal Term, MP shall pay to AOL a
guaranteed payment of [XXXXXXXXXXXXXXXXXXXXXXXX] payable as follows:
[XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX]
6.3 Termination for Breach. Except as expressly provided elsewhere in this
-----------------------
Agreement, 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 MP
in connection with MP's failure to make any payment to AOL required
hereunder. Notwithstanding the foregoing, in the event of a material
breach of a provision that expressly requires action to be completed within
an express period shorter than 30 days, either Party may terminate this
Agreement if the breach remains uncured after written notice thereof to the
other Party. In the event that MP terminates this Agreement in accordance
with the terms and conditions of this Section 6.3 due to a material breach
of AOL of the terms of this Agreement, provided that MP shall have paid all
amounts then due and owing pursuant to Section 4.1, 4.2 and 4.3 hereof, MP
shall no longer owe any amounts due under Sections 4.1, 4.2 or 4.3.
6.4 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) calender days or (iv) makes an
assignment for the breach of creditors.
6.5 Termination on Change of Control. In the event of a Change of Control of MP
--------------------------------
resulting in control of MP by an Interactive Service other than AOL, AOL
may terminate this Agreement by providing to MP thirty (30) days prior
written notice of such intent to terminate.
6.6 Expiration of Term. Upon the termination of this Agreement by AOL, pursuant
------------------
to Section 6.3, or the expiration of the Initial Term, the AOL Renewal Term
or the MP Renewal Term. AOL shall have the right for successive one year
periods (each a "Renewal Term") to promote one or more "pointers" or links
from the AOL Network to any MP Interactive Site selling products
substantially similar to the MP products (the "Link"); provided that (i)
AOL shall have the right to use MP's tradenames, trademarks and service
marks in connection with the Link and (ii) MP shall not be required to
perform the
10
Confidential
cross promotional obligations required hereunder.
6.6.1 Payments. In connection with the foregoing, MP shall
--------
make the following payments to AOL:
(a) an amount equal to [xxxxxxxxxxxx] of all revenues
derived from the sale of products in the MP
Interactive Site which are attributable to the Link
(the "MP Interactive Transaction Revenues") during
the first Renewal Term:
(b) an amount equal to the greater of (i)[xxxxxxxxx]
of all MP Interactive Transaction Revenues and (ii)
the standard percentage of revenues paid to other
vendors of MP during the second Renewal Term: and
(c) a percentage of MP Interactive Transaction
Revenues that is no less than the standard percentage
of revenues paid to other vendors of MP at all times
after the second Renewal Term.
6.6.2 Exclusivity. AOL shall have the right to maintain the
-----------
exclusivity provisions of Section 3.1 hereof during
any Renewal Term (the "Exclusivity Right"); provided,
however, that the Exclusivity Right shall be
exercisable by AOL for an aggregate period not to
exceed two Renewal Terms. In the event that AOL
exercises the Exclusivity Right during any Renewal
Term, notwithstanding the provisions of Section
6.6(ii), MP shall continue to perform the cross
promotional obligations required hereunder.
7 MANAGEMENT COMMITTEE/ARBITRATION. If the Parties are unable to resolve
--------------------------------
any dispute, controversy or claim arising under this Agreement
(excluding any disputes relaxing 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 arbitration in Washington, D.C. under the auspices of the
American Arbitration Association; provided that the Federal Rules of
Evidence shall apply 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 delays 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 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 two (2) senior executives
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. Notwithstanding the foregoing,
during the resolution of any Dispute, the Parties hereto shall
continue to make all payments required hereunder.
8 STANDARD TERMS. The Standard Online Commerce Terms & Conditions set
--------------
forth in Exhibit F attached hereto and Standard Legal Terms &
Conditions set forth on Exhibit G attached hereto are each hereby made
a part of this Agreement.
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the
Effective Date.
AMERICA ONLINE, INC. CYBERIAN OUTPOST, INC.
By: /s/ Xxxxx X Xxxxxxx By: /s/ Xxxxxx Xxxx
-------------------------------- --------------------------------
Print Name: Xxxxx X. Xxxxxxx Print Name: Xxxxxx Xxxx
----------------------- -----------------------
Title: Sr. Vice President Title: President/CEO
---------------------------- ----------------------------
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EXHIBIT A
Placement/Promotion Plan
------------------------
AOL Networks Placement and Integration
---------------------------------------------------------------------------------------
# Screen Item Frequency
---------------------------------------------------------------------------------------
COMPUTING CHANNEL PLACEMENT
---------------------------------------------------------------------------------------
1 Channel Main Bottom Feature Product 50% Non-exclusive
Promotion screen
---------------------------------------------------------------------------------------
2 Channel Main Rotated Banner 11% Non-exclusive
screen
---------------------------------------------------------------------------------------
3 Superstore Main* 1 Promotion Box Permanent Exclusive screen
---------------------------------------------------------------------------------------
4 Superstore Main* Product Search for Hardware Permanent Exclusive screen
and Mail Order Software
---------------------------------------------------------------------------------------
5 Superstore Exclusive Integration in Permanent Exclusive screen
Hardware Hardware Categories
Category* List Box
---------------------------------------------------------------------------------------
6 Superstore Feature Product Promotion- 15 rotations/mth Exclusive screen
Hardware
Category*
---------------------------------------------------------------------------------------
7 Superstore Shared Integration in Permanent Non-exclusive
Software Software Categories
Category* List Box
---------------------------------------------------------------------------------------
8 Superstore Feature Product Promotion- 15 rotations/mth Non-exclusive
Software 50% of total
Category*
---------------------------------------------------------------------------------------
9 Companies List Box Listing Permanent Non-exclusive
---------------------------------------------------------------------------------------
10 Companies Banner-Rotated between 11% Non-exclusive
nine sponsors
---------------------------------------------------------------------------------------
11 Buyer's Guide Name Integration and Permanent Exclusive screen
Banner
---------------------------------------------------------------------------------------
12 Buyer's Guide Bottom Feature Product 50% Exclusive screen
Button
---------------------------------------------------------------------------------------
13 Miscellaneous Banners Non-exclusive
Channel
---------------------------------------------------------------------------------------
14 Weekly Byte- Article links Permanent Exclusive screen
Channel
Newsletter
---------------------------------------------------------------------------------------
SHOPPING CHANNEL PLACEMENT
---------------------------------------------------------------------------------------
15 Computer Anchor Permanent Non-exclusive
---------------------------------------------------------------------------------------
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--------------------------------------------------------------------------------
Software
Department
--------------------------------------------------------------------------------
16 Computing Anchor Permanent Non-exclusive
Hardware
Department
--------------------------------------------------------------------------------
* Computer Superstore is presently being redesigned. The actual item design is
subject to change.
XXX.XXX Placement and Integration
--------------------------------------------------------------------------------
# Area Item Frequency
--------------------------------------------------------------------------------
AOL Netfind Timesavers Placement
--------------------------------------------------------------------------------
1 Buy a Computer Shortcut Permanent Non-exclusive
- Main
--------------------------------------------------------------------------------
2 Home & Family Recipes/Financial Planning Permanent Non-exclusive
- Main Software Store, listing &
review
--------------------------------------------------------------------------------
3 Your Health - Health/Research Software Permanent Non-exclusive
Main Store, listing & review
--------------------------------------------------------------------------------
4 Reference Source Research, Software Store, Permanent Non-exclusive
- Main listing & review
--------------------------------------------------------------------------------
Net channels Placement
--------------------------------------------------------------------------------
5 Computing Main Shortcut Permanent Non-exclusive
--------------------------------------------------------------------------------
6 Computing Main Listing & Review Pointer Permanent Non-exclusive
--------------------------------------------------------------------------------
Keywords
--------
The Affiliated MP Site will be accessible from the AOL Network through the
use of the keyword "Outpost", "Cyberian" and "Cyberian Outpost" (or such
other keyword as AOL may assign to MP in the case of a name change;
provided, however, that such keyword (i) shall at all times be subject to
availability and (ii) shall be a "non-generic" trademark of MP).
14
Confidential
EXHIBIT B
Definitions
-----------
The following definitions will apply to this Agreement:
Additional MP Channel. Any other distribution channel (e.g., an interactive
---------------------
Service other than AOL) through which MP makes available an offering comparable
in nature to the Affiliated MP Site.
Advertising Revenues. Aggregate amounts collected plus the fair market value of
--------------------
any other compensation received (such as barter advertising) by MP, or its
agents, arising from the license or sale of advertisements, promotions, links or
sponsorships ("Advertisements") that appear within any pages of the Affiliated
MP Site or on any screens or forms preceding, framing or otherwise directly
associated with the Affiliated MP Site, less applicable Advertising Sales
Commissions and (b) any co-op marketing fees, or any similar fees collected by
MP from vendors for (i) "shelf space" in any MP Interactive Site linked to from
the AOL Network or (ii) direct marketing efforts directed at any AOL Member or
AOL User.
Advertising Sales Commission. (i) Actual amounts paid as commission to third
----------------------------
party agencies in connection with the 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 MP Site. The specific area to be promoted and distributed by AOL
------------------
hereunder through which MP can market and complete transactions regarding the MP
Products.
AOL Interactive Site. Any Interactive Site which is managed, maintained, owned
--------------------
or controlled by AOL or its agents.
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.
AOL Network. (i) The AOL Service, (ii) XXX.xxx and (iii) any other product or
-----------
service owned, operated, distributed or authorized to be distributed by or
through AOL or its affiliates worldwide (and including those properties excluded
from the definitions of the AOL Service or XXX.xxx).
AOL Purchaser. Any person or entity who enters the Affiliated MP Site, and
-------------
purchases an MP Product or any other products or services sold therein.
AOL Service. The U.S. version of the America Online(R) brand service,
-----------
specifically excluding (a) XXX.xxx or any other AOL Interactive Site, (b) the
International versions of the AOL Service (e.g., AOL Japan), (c) "Driveway,"
"NetFind," "AOL Instant Messenger" or any similar product or service offered by
or through the U.S. version of the America Online(R) brand service, (d) "Digital
Cities," "WorldPlay," "Entertainment Asylum," the "HUB," or any similar
"sub-service" offered by or through the U.S. version of the America Online(R)
brand service, (e) any yellow pages, white pages, classifieds or other search,
directory, or review services or Content offered by or through the U.S. version
of the America Online(R) brand service, (f) any AOL product or service delivered
primarily through a broadband distribution platform (including a television
platform), (g) any co-branded or private table branded version of the AOL
service and (h) any 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
complete or substantially complete operational control (e.g., third-party
Content areas, any Interactive Site containing "xxxxxxx.xxx.xxx" as part of its
URL).
15
Confidential
AOL User. Any user of the AOL Service or XXX.xxx.
--------
XXX.xxx. AOL's primary Internet-based Interactive Site marketed under the
-------
"XXX.XXX" brand, specifically excluding (a) the AOL Service, (b) any
international versions of XXX.xxx. (c) "Driveway," "NetFind," "AOL Instant
Messager" or any similar product or service offered by or through such site or
any other AOL Interactive Site, (d) "Digital Cities," "WorldPlay,"
"Entertainment Asylum," "the Hub,"or any similar "sub-service" offered by or
through such site or any other AOL Interactive Site, (e) any yellow pages, white
pages, classifieds or other search or directory services offered by or through
such site or any other AOL Interactive Site and (f) any programming or content
area offered by or through such site or any other AOL Interactive Site over
which AOL does not exercise complete or substantially complete operational
control (e.g., third-party Content areas, any Interactive Site containing
"xxxxxxx.xxx.xxx" as part of its URL).
Change of Control. (a) The consummation of a reorganization, merger or
----------------
consolidation or sale or other disposition of substantially all of the assets of
a party; or (b) the acquisition by an individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended) of beneficial ownership (within the meaning of Rule 13-d 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. Notwithstanding the foregoing, the initial public
offering of securities of MP pursuant to an effective registration statement
under the Securities Act of 1933, as amended, shall not be considered a Change
of Control.
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, AOL
Users, AOL Purchasers and MP 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
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, or (d) lawfully obtained from any
third party.
Content. Information, materials, features, products, advertisements,
-------
promotions, links, pointers and software, including any modifications, upgrades,
updates, enhancements and related documentation.
Exclusive Screens. The specific promotional areas or portions thereof, of the
-----------------
AOL Service and XXX.xxx wherein which AOL will promote the Exclusive Products as
described in Exhibit A.
Impression. 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 that 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 (including, without limitation, any online service
providers, Internet service providers, WebTV, @Home or other broadband
providers, search or directly providers, "push" product providers such as the
Pointcast Netcash Network or providers of interactive navigational environments
such as Microsoft's proposed "Active Desktop").
Interactive Site. Any interactive site or area, including, by way of example
----------------
and without limitation, (i) an MP 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."
Licensed Content. All Content offered through the Affiliated MP Site pursuant
----------------
to this Agreement or otherwise provided to AOL by MP for related purposes (e.g.,
Promotions, AOL "slideshows", etc.).
16
including in each case, any modifications, upgrades, updates, enhancements, and
related documentation.
MP Interactive Site. Any Interactive Site (other than the Affiliated MP Site)
-------------------
which is managed, maintained, owned and controlled by MP or its agents.
MP Product. Any product, good or service which MP (or others acting on its
----------
behalf or as distributors) offers, sells, provides, distributes or licenses to
AOL Users directly or indirectly through (i) the Affiliated MP Site (including
through any Interactive Site linked thereto) and which are listed on Exhibit D-1
to the Agreement, (ii) any other electronic means related to an AOL User's visit
to the Affiliated MP Site (e.g., e-mail offers following user registration), or
(iii) an "offline" means (e.g., toll-free number) for receiving orders related
to specific offers within the Affiliated MP Site requiring purchasers to
reference a specific promotional identifier or tracking code.
Target Revenues. The sum of (a) MP Revenues and (b) [XXX] of the gross revenues
---------------
generated by user of any MP Interactive Site with and XXX.xxx address of URL,
excluding any revenues generated by individuals listed on Exhibit D-2 attached
hereto.
Transaction Revenues. Aggregate amounts paid by AOL Purchasers in connection
--------------------
with the sale, licensing, distribution or provision of any MP Products,
including, in each case, service charges, and excluding, in each case, amounts
collected for sales or use taxes or duties.
17
Confidential
EXHIBIT C
MP Cross-Promotion
------------------
Online
------
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
in an MP Interactive Site, MP shall also provide a Promotional Presence to AOL
in such MP Interactive Site linking to such areas of the AOL Network as
determined by AOL and to the extent that MP provides promotional information
about the products of any other Interactive Service. MP shall provide a
prominent "Try AOL" feature where 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) on terms and
conditions (including, without limitation, scope, purpose, amount, prominence or
regularity) that are no less favorable than the terms and conditions provided to
such other Interactive Service. To the extent that MP shall undertake any of the
foregoing promotions with respect to AOL, MP shall also promote AOL as its
preferred Interactive Service.
Offline
-------
MP shall promote AOL in MP's television, radio and print advertisements and in
any publications, programs, features or other forms of media over which MP
exercises at least partial editorial control, including, without limitation, the
following:
. Specific references or mentions (verbally where possible) of the Affiliated
MP Site's availability through American Online(R) immediately following any
reference to any MP Interactive Site; and
. Prominent promotion of the AOL "keyword" for the Affiliated MP Site whenever
it mentions the "URL(s)" for the MP Interactive Site.
Member Acquisition Programs
---------------------------
The Parties shall negotiate, in good faith, various AOL member acquisition
programs, including, without limitation, the bundling of AOL software with
products (i.e.: computer hardware, peripheral and packaged software) shipped by
MP to existing MP customers who are not members of AOL./2/
------------------
/1/ AOL will pay MP a one-time standard bounty for each person who registers for
the AOL Network using MP's special identifier for this promotion and
subsequently pays AOL monthly usage fees across at least three 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 any AOL application setup
program within the Operating System (all subject to any standard policies of the
Operating System).
/2/ AOL will pay MP a one-time standard bounty for each person who registers for
the AOL Network using MP's special identifier for this promotion and
subsequently pays AOL monthly usage fees across at least three billing cycles
for the use of the AOL Network.
18
Confidential
EXHIBIT D-1
Description of MP Products and Other Content
--------------------------------------------
The products sold on MP's primary website at xxxx://xxx.xxxxxxxxxxxxxxx.xxx as
of the Effective Date hereof (e.g., CPU's, laptops, notebook computers,
monitors, mouses, disk drives, modems, keyboards, printers, computer manuals,
computer books and such comparable, additional computer hardware products
directly related to the use of a CPU, software, speakers, video game consoles,
joysticks, electronic organizers (or other Windows CE devices), calculators,
pagers and a limited selection of other similar electronic products, and
accessories). To the extent that MP offers, or intends to offer, any products
which in any way conflicts with any of AOL's existing exclusively arrangements
(including, without limitation, books). MP and AOL shall mutually agree upon (i)
whether such products will be sold in the Affiliated MP Site, and (ii) the
manner in which such products will be sold. To the extent that MP offers, or
intends to offer, any products which in any way conflicts with any of AOL's
existing exclusivity arrangements (including, without limitation, books), MP and
AOL shall mutually agree upon (i) whether such products will be sold in the
Affiliated MP Site, and (ii) the manner in which such products will be sold.
19
Confidential
EXHIBIT D-2
Pre-Existing AOL Member Customers of MP
---------------------------------------
[XXXXXX]
20
Confidential
EXHIBIT E
Operating Standards
-------------------
1. General. MP shall comply with all terms set forth in this Exhibit E within
-------
ninety (90) days of the Effective Date and for the remainder of the Term. The
Affiliated MP Site (including the MP Products and other Content contained
therein) will be in the top ten (10) in computer hardware and peripherals
industry, as determined by each of the following methods: (a) based on a
cross-section of third-party reviewers who are recognized authorities in such
industry and (b) with respect to all material quality averages or standards in
such industry, including each of the following: (i) pricing of MP Products, (ii)
scope and selection of MP Products, (iii) quality of MP Products, (iv) customer
service and fulfillment associated with the marketing and sale of MP Products
and (v) ease of use. In addition, the Affiliated MP Site will, with respect to
each of the measures listed above, be competitive in all respects with that
which is offered by any MP Competitors.
2. Hosting; Capacity. MP 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 HVAC,
adequate insurance, adequate service contracts and all necessary equipment
racks, floor space, network cabling and power distribution to support the
Affiliated MP Site. In the event MP fails to satisfy this requirement AOL will
have the right (in addition to any other remedies available to AOL hereunder) to
regulate the Promotions to the extent necessary to minimize user delays until
such time as MP corrects its infrastructure deficiencies.
3. Speed; Accessibility. MP will ensure that the performance and availability
-------------------
of the Affiliated MP 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. MP will
ensure that (a) the functionality and feature within the Affiliated MP Site are
optimized for the client software then in use by AOL Users; and (b) the
Affiliated MP Site is designed and populated in a manner that minimized delays
when AOL Users attempt to access such site.
4. User Interface. MP will maintain a graphical user interface within the
--------------
Affiliated MP Site that is competitive in all material respects with interfaces
of other similar sites based on similar technology. AOL reserves the right to
conduct focus group testing to assess compliance herewith.
5. Service Level Response. MP agrees to provide the following service levels in
----------------------
response to problems with or improvements to the Affiliated MP Site:
* For material functions of software that are or have become substantially
inoperable, MP will provide a bug fix or workaround within two (2) business
days after the first report of such error.
* For functions of the software that are impaired or otherwise fail to operate
in accordance with agreed upon specifications, MP will provide a bug fix or
workaround within three (3) business days after the first report of such
error.
* For errors disabling any certain non-essential functions, MP will provide a
bug fix or workaround within sixty (60) days after the first report of such
error.
* For all other errors, MP will address these requests on a case-by-case basis
as soon as reasonably feasible.
6. Monitoring. AOL Network Operations Center will work with a MP designated
----------
technical contact in the event of any performance malfunction or other
emergency related to the Affiliated MP Site and will either assist or work in
parallel with MP's contact using MP 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.
7. 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 Users. The network will be sized such that no
single line runs at more than 70% average utilization for a 5-minute peak in a
daily period.
8. Security Review. MP and AOL will work together to perform an initial
---------------
security review of, and to perform tests of, the MP system, network, and service
security in order to evaluate the security risks and provide recommendations to
MP, including periodic follow-up reviews as reasonably required by MP or AOL. MP
will 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 AOL's
Operations Security team will be as determined by AOL in its sole discretion.
9. Technical Performance. MP will perform the following technical obligations
---------------------
(and any updates thereto provided by AOL from time to time):
* MP will design the Affiliated MP Site to support the Windows version of the
Microsoft Internet Explorer 4.0 browser, and make commercially reasonable
efforts to support all other AOL browsers listed at:
"xxxx://xxxxxxxxx.xxxx.xxx.xxx/XxxxXxxxx.xxxx."
* MP 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."
* MP will design its site to support HTTP 1.0 or later protocol as defined in
RFC 1945 (available at "xxxx://xx.xxxxxxx.xxx/xxx/xxx0000.xxxx") and to adhere
to AOL's parameters for refreshing cached information listed at
"xxxx://xxxxxxxxx.xxxx.xxx.xxx/XxxxxXxxx.xxxx."
21
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EXHIBIT F
Standard Online Commerce Terms & Conditions
-------------------------------------------
1 AOL Network Distribution. MP will not authorize or permit any third party to
------------------------
distribute or promote the MP Products or any MP Interactive Site through the AOL
Network absent AOL's prior written approval. The Promotions and any other
promotion or advertisement purchased from or provided by AOL will link only to
the Affiliated MP Site.
2 Provision of Other Content. In the event that AOL notifies MP that (i) as
---------------------------
reasonably determined by AOL, any Content within the Affiliated MP 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 MP Site (other than any specific items of Content
which may be expressly identified in this Agreement), then MP will take
commercially reasonable steps to block access by AOL Users to such Content using
MP's then-available technology. In the event that MP cannot, through its
commercially reasonable efforts, block access by AOL Users to the Content in
question, then MP will provide AOL 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. MP will cooperate with AOL's reasonable
requests to the extent AOL elects to implement any such access restrictions.
3 Contests. MP will take all steps necessary to ensure that any contest,
--------
sweepstakes or similar promotion conducted or promoted through the Affiliated MP
Site (a "Contest") complies with all applicable federal, state and local laws
and regulations
4 Navigational Icons. Subject to the prior consent of MP, which consent will
------------------
not be unreasonably withheld, AOL will be entitled to establish navigational
icons, links and pointers connecting the Affiliated MP Site (or portions
thereof) with either consent areas on or outside of the AOL Network.
5 Disclaimers. Upon AOL's request, MP agrees to include within the Affiliated
-----------
MP Site a product disclaimer (the specific term and substance to be mutually
agreed upon by the Parties) indicating that transactions are solely between MP
and AOL Users purchasing MP Products from MP.
6 AOL Look and Feel. MP 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 MP's ownership rights in any MP trademarks or copyrighted material
within the Affiliated MP Site.
7 Management of the Affiliated MP Site. MP will manage, review, create, edit,
------------------------------------
update and otherwise manage all MP Products available on or through the
Affiliated MP Site, in a timely and professional manner and in accordance with
the terms of this Agreement. MP will ensure that each Affiliated MP Site is
current, accurate and well-organized at all times. MP warrants that the MP
Products and other Content contained therein 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
violate any applicable law or regulation, including those relating to contests,
sweepstakes or similar promotions. Additionally, MP represents and warrants that
it owns or has a valid license to all rights to any Licensed Content used in
AOL "slideshow" or other formats ??????? elements such as graphics, animation
and sound, free and clear of all encumbrances and without violating the rights
of any other person or entity. MP also warrants that a reasonable basis exists
for all MP Product performance or comparison claims appearing through the
Affiliated MP Site. AOL will have no obligations with respect to the MP Products
available on or through the Affiliated MP Site, including, but not limited to,
any duty to review or monitor any such MP Products.
8 Duty to Inform. MP will promptly inform AOL of any information related to
--------------
the MP Products of Affiliated MP 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 MP to provide customer
----------------
service to persons or entities purchasing MP Products through the AOL Network
("Customers"), MP will bear full responsibility for all customer service,
including without limitation, order processing, billing, fulfillment, shipment,
collection and other customer service associated with any MP Products offered,
sold or licensed through the Affiliated MP Site, and AOL will have no
obligations whatsoever with respect thereto. MP will receive all emails from
Customers via a computer available to MP's customer service staff and generally
respond to such emails within one business day of receipt. MP will receive all
orders electronically and generally process all orders within one business day
of receipt, provided MP Products ordered are not advance order items. MP will
ensure that all orders of MP Products are received, processed, fulfilled and
delivered on a timely and professional basis. MP will make all commercially
reasonable efforts to have its vendors and/or manufacturers offer AOL Users who
purchase MP Products through the Affiliated MP Site a money back satisfaction
guarantee. To the extent that MP is unable to offer a money back satisfaction
guarantee, MP shall inform all AOL Users who purchase MP Products that such a
guarantee is not available. MP will bear all responsibility for compliance with
federal, state and local laws in the event that MP Products are out of stock or
are no longer available at the time an order is received. MP will also comply
with the requirements of any federal, state or local consumer protection or
disclosure law. Payment for MP Products will be collected by MP directly from
customers. MP's order fulfillment operations will be subject to AOL's reasonable
review.
10 Frequency Work. In the event that MP requests AOL's production assistance in
--------------
connection with (i) ongoing programming and maintenance related to the
Affiliated MP Site, (ii) a redesign of or addition to the Affiliated MP Site
e.g., a change to an existing screen format or construction of a new custom
form, (iii) production to satisfy work performance by a third party provider or
(iv) any other type of production work, MP will work with AOL to
22
Confidential
develop a detailed production plan for the requested production assistance (the
"Production Plan"). Following receipt of the final Production Plan, AOL will
notify MP 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 agreed-upon
Production Plan, such agreement will be reflected in a separate work order
signed by the Parties. To the extent MP 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 MP upon request). The specific production
resources which AOL allocates to any production work to be performed on behalf
of MP will be as determined by AOL in its sole discretion.
11. Overhead Accounts. To the extent AOL has granted MP any overhead accounts
-----------------
on the AOL Service, MP 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 MP, but MP 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. AOL User Communications. To the extent MP sends any form of communications
-----------------------
to AOL Users, MP will promote the Affiliated MP Site as the location at which to
purchase Products (as compared to any more general or other site or location).
In addition, MP will not encourage AOL Users to take any action inconsistent
with the scope and purpose of this Agreement, including without limitation, the
following actions: (a) using Content other than the Licensed Content;
(b) bookmarking of Interactive Sites other than the Affiliated MP Site;
(c) using Interactive Sites other than those covered by the revenue-sharing
provisions herein; (d) changing the default home page on the AOL browser; or
(e) using any Interactive Service other than AOL.
13. Merchant Certification Program. MP will participate in any generally
------------------------------
applicable "Certified Merchant" program operated by AOL or its authorized agents
or contractors. Such program may require merchant participants on an ongoing
basis to meet certain reasonable standards relating to provision of electronic
commerce through the AOL Network (including, as a minimum, use of 40-bit SSL
encryption and if requested by AOL, 128-bit encryption) and may also require the
payment of certain reasonable certification fees to the applicable entity
operating the program. Each Certified Merchant in good standing will be
entitled to place on its affiliated Interactive Site an AOL designed and
approved button promoting the merchants status as an AOL Certified Merchant.
23
Confidential
EXHIBIT G
Standard Legal Terms and Conditions
-----------------------------------
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 MP Site and/or referencing the
other Party and/or its trade names, trademarks, and service marks (the
"Materials"); provided, however, that either Party's use of screen shots of the
Affiliated MP Site for promotional purposes will not require the approval of the
other Party so long as American Online(R) is clearly identified as the source of
such screen shots. Each Party will solicit and reasonably consider the views of
all 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 MP 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, 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. MP hereby grants AOL a non-exclusive worldwide license to market,
-------
license, distribute, reproduce, display, perform, transmit and promote the
Licensed Content (or any portion thereof) through such areas or features of the
AOL Network as AOL deems appropriate and in accordance with the terms of this
Agreement. MP acknowledges and agrees that the foregoing license permits AOL to
distribute portions of the Licensed Content in synchronism or timed relation
with visual materials prepared by MP or AOL (e.g., as part of an AOL
"slideshow"). In addition, AOL Users will have the right to access and use the
Affiliated MP Site.
3 Trademark License. In designing and implementing the Materials and subject
-----------------
to the other provisions contained herein, MP will be entitled to use the
following trade names, trademarks, and service marks of AOL: 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 trade names, trademarks, and
service marks of MP (collectively, together with the AOL marks listed above, 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 in
accordance with applicable trademark law and practice.
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 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. MP hereby represents and warrants that it possesses all
authorizations, approvals, consents, licenses, permits, certificates or other
rights and permissions necessary to sell the MP Products.
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 three 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, who will each agree to comply with this section.
Notwithstanding the foregoing, either Party may issue a press release or other
disclosure containing Confidential Information without the consent of the other
Party, to the extent such disclosure is required by law, rule, regulation or
government or court order. 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
Confidential
(ii) submit a request to such governing body that such portions and other
provisions of this Agreement receive confidential treatment under the laws,
rules and regulations of the Securities and Exchange Commission or otherwise be
held in the strictest confidence to the fullest extent permitted under the laws,
rules or regulations of any other applicable governing body. Notwithstanding
anything to the contrary contained herein, AOL agrees that MP may disclose to
prospective investors of MP the existence of this Agreement, a mutually
acceptable summary of the general terms of this Agreement, and information
concerning the terms of the Warrants issuable to AOL pursuant to this Agreement
provided, however, that MP shall take reasonable steps, at least substantially
equivalent to the steps it takes to protect its own proprietary information, to
protect the information provided to any such prospective investors.
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 MP PRODUCTS, THE FRAUDULENT
PURCHASE OF MP PRODUCTS, THE USE OR INABILITY TO USE THE AOL NETWORK, THE AOL
SERVICE, AOLCOM OR THE AFFILIATED MP 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 THE AMOUNTS PAYABLE HEREUNDER IN THE YEAR IN
WHICH ANY DISCLAIMED DAMAGES FOR WHICH INDEMNIFICATION IS SOUGHT ARISES OR
ACCRUES; 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, AOLCOM OR THE AFFILIATED MP 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 MP 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 MP hereunder, and in such event, MP will have no
further obligation to provide indemnification for such matter hereunder.
9.5 Acknowledgment. AOL and MP 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 any severable from any other enforceable or
unenforceable provision of this Agreement.
10 Solicitation of AOL Users. During the term of this Agreement, and for the
-------------------------
two-year period following the expiration or termination of this Agreement,
neither MP nor its agents will use the AOL Network to (i) solicit, or
participate in the solicitation of AOL Users when that solicitation is for the
benefit of any entity (including MP) 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, MP may not send AOL
Users e-mail communications promoting MP'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 MP through the AOL Network or (ii) voluntarily provided
information to MP 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 MP or its agents. A
Prior Business Relationship does not exist by virtue of an AOL User's visit to
an Affiliated MP Site (absent the elements above). More generally, MP will be
subject to any standard policies regarding e-mail distribution through the AOL
Network which AOL may implement.
11 Collection of User Information. MP is prohibited from collecting AOL
------------------------------
Member screennames or AOL User email addresses from public or private areas of
the AOL Network, except as specifically provided below. MP 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 or AOL User email addresses and automated methods of
collecting such information (an "Information Request") complies with (i) all
applicable laws and regulations and (ii) any privacy policies which have been
issued by AOL ??????? during the Term (the "AOL Privacy Policies"). Each
Information Request will clearly and conspicuously specify to the AOL Users at
issued the purpose for which User
25
Confidential
information collected through the Information Request will be used (the
"Specified Purpose").
12 Use of User Information. MP will restrict use of the User Information
-----------------------
collected through an Information Request to the Specified Purpose. In no event
will MP (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 Users as end-users of the AOL Service, XXX.xxx or the AOL
Network or (iv) otherwise use any User Information in contravention of Section
11 above. Notwithstanding the foregoing, in the case of AOL Members who purchase
MP Products from MP, MP will be entitled to use User Information from such AOL
Members as part of MP's aggregate list of Customers; provided that MP's use does
not in any way identify, promote or otherwise disclose such User Information in
a manner that identifies such AOL Members as end-users of the AOL Service.
XXX.xxx or the AOL Network. In addition, MP will not use any User Information
for any purpose (including any Specified Purpose) not directly related to the
business purpose of the Affiliated MP 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.
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 or, 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: (ii) one
business day after deposit with a commercial overnight carrier, with written
verification of receipt, or (iii) 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, to the person(s) specified below at
the address of the Party set forth in the first paragraph of this Agreement.
16 No Waiver. The failure of either Party to insist upon or enforce strict
---------
performance by the other Party or 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 materials specified the other Party.
18 Survival. Sections 9 through 12 of this Exhibit G, 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. 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 by an executive of at least the
same standing to the executive who signed the Agreement.
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. MP will not assign this Agreement or any right, interest or
----------
benefit under this Agreement without the prior written consent of AOL. 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
affect.
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, MP will not be
entitled to offset any amounts that it claims to be due and payable from AOL
against amounts otherwise payable by MP 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. Each Party irrevocably
consents to the exclusive jurisdiction of the courts of the Commonwealth of
Virginia and the federal courts situated in the Commonwealth of Virginia, in
connection with any action to enforce the provisions of this Agreement, to
recover damages or other relief for breach or default under this Agreement, or
otherwise arising under or by reason of this Agreement.
26 Expert Controls. Both Parties will adhere to all applicable laws,
---------------
regulations and rules relating to the expert
26
Confidential
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 prescribed 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.
27
Confidential
EXHIBIT H
MP COMPETITORS
[xxxxxx]
[xxxxxx]
CDW (Computer Discount Warehouse)
[xxxxxx]
CompUSA
[xxxxxx]
Creative Computers
Egghead
[xxxxxx]
[xxxxxx]
[xxxxxx]
Insight
[xxxxxx]
MicroCenter
Micro Warehouse
[xxxxxx]
[xxxxxx]
PC Connection
[xxxxxx]
[xxxxxx]
Cyberian retains the right to add to this list from time to time as new
competitors enter the market subject to the prior approval of AOL, which
approval shall not be unreasonably withheld.
28
