Certain confidential information has been omitted and filed separately with the
Commission pursuant to a Request for Confidential Treatment.
Such material has been replaced with a legend indicating such omission and is
marked with brackets "[" "]".
CONFIDENTIAL
INTERACTIVE MARKETING AGREEMENT
This Agreement, effective as of July 30, 1996 (the "Effective Date"), is
made and entered into by and between America Online, Inc.("AOL"), a Delaware
corporation, with its principal offices at 0000 Xxxxxxxx Xxxxxx Xxxxx, Xxxxxx,
Xxxxxxxx 00000, and Cybershop LLC ("Information Provider"), a New Jersey
corporation, with its principal offices at 000 Xxxxx Xxx., Xxxxxxxxx, XX 00000
(each a "Party" and collectively the "Parties").
INTRODUCTION
AOL and Information Provider each desire that Information Provider provide
the Online Area (as defined below) on the AOL Network (as defined below),
subject to the terms and conditions set forth in this Agreement.
TERMS
1. DEFINITIONS. The following definitions shall apply to this Agreement:
1.1 AFFILIATE. Any agent, distributor, or franchisee of AOL, or an
entity in which AOL holds at least a thirty percent (30%) equity
interest.
1.2 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 online areas within
the America Online (R) brand service.
1.3 AOL MEMBER(S). Authorized users of the AOL Network, including
any subaccounts using the AOL Network under an authorized master
account.
1.4 AOL NETWORK. The America Online (R) brand service and any other
information, communication, transaction or other related service
owned, operated, distributed or authorized to be distributed by
or through AOL or its Affiliates throughout the world through
which AOL elects to offer the Online Area, including, without
limitation, the Global Network Navigator ("GNN") Service.
1.5 COMMERCIAL LAUNCH. The commencement of the general availability
of the Online Area to AOL Members (by means other than
unadvertised keyword access).
1.6 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,
technical processes and formulas, source codes, product designs,
sales, cost and other unpublished financial information, product
and business plans, projections, and marketing data.
"Confidential Information" shall not include information (a)
already lawfully known to or independently developed by the
receiving Party, (b) disclosed in published materials, (c)
generally known to the public, (d) lawfully obtained from any
third party, or (e) required or reasonably advised to be
disclosed by law.
1.7 DESIGN PACKAGE. Content plans, flow charts and artwork which
together represent the appearence, user interface, content and
operation of the Online Area.
1.8 GNN MEMBERS. Authorized users of the GNN Service, including any
sub-accounts using the GNN Service under an authorized master
account.
1.9 GNN READERS. Users of content within the GNN Service who are not
GNN Members and who are therefore limited to an unrestricted
class of content made available through the GNN Service to
anyone with the technical capability of reaching GNN's
programming via the World Wide Web portion of the internet.
1.10 GNN SERVICE. The Global Network Navigator (TM) brand service
(located at xxxx://xxx.xxx.xxx) and any other information,
communication, transaction or other related service owned,
operated or distributed by GNN throughout the world.
1.11 GNN TERMS OF SERVICE. Any guidelines designed for GNN Users of
the GNN Service which GNN may elect to create, as such
guidelines may be modified from time to time at GNN's sole
discretion.
1.12 GNN USERS. That combination of GNN Members and/or GNN Readers
who may have access to the Content Area.
1.13 LICENSED C&S (LICENSED CONTENT AND SERVICES). All content,
services and Products offered through the Online Area pursuant
to this Agreement, including any modifications, upgrades,
updates, enhancements, and related documentation.
1.14 NEW MEMBERS. Any person or entity (a) who registers for the AOL
Network using Information Provider's special promotion
identifier and (b) from whom AOL or an Affiliate collects a
payment of at least one monthly usage fee for the use of the AOL
Network.
1.15 ONLINE AREA. The specific area within the AOL Network which
contains the exclusive area in the AOL Network where Information
Provider can market and complete transactions regarding
Information Provider's Products, as more fully described in
Section 2.1.1 below. The Online Area shall be developed, managed
and marketed by Information Provider pursuant to this Agreement,
including but not limited to the Licensed C&S, message boards,
chat and other AOL Member or GNN User-supplied content areas.
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1.16 OVERHEAD ACCOUNTS. Accounts of AOL Members for which AOL does
not require payment of standard AOL subscription and usage
charges.
1.17 PRODUCTS. Any product, good, or service which Information
Provider offers, sells or licenses to AOL Members and/or GNN
Users through the Online Area.
1.18 SALES REVENUES. Aggregate amounts paid by AOL Members and/or GNN
Users in connection with the sale, licensing, distribution or
provision of any Products, excluding, in each case, amounts
collected for sales or use taxes, duties, handling, shipping,
and similar charges (except as provided in section 2.1.13), and
credits for returned goods or services, but not excluding cost
of goods sold or any similar cost.
2. ONLINE AREA.
2.1 DUTIES AND RIGHTS OF INFORMATION PROVIDER. Information Provider
shall supply, manage and market the Online Area as described
below, at its own expense, subject to the following terms and
conditions:
2.1.1 Online Area. Information Provider shall create or
develop the Online Area, (with the assistance of AOL's
services to the extent described in Exhibit A hereto),
which shall consist of the following materials,
services, and features:
[Described the Online Area, including Licensed C&S,
Products and publication format-BE SPECIFIC]
On-line department store including housewares, bedding,
electronics, children's products, jewelry, fashion
accessories, luggage, stationary, cosmetics, gourmet
food, lamps, rugs, furniture, outdoor equipment,
exercise equipment.
In no event shall the Licensed C&S contain less than 50
Products.
From and after the Effective Date, Information Provider
shall prepare the Design Package in consultation with
AOL.
2.1.2 Preparation for Commerical Launch. Within no more than 3
months after the Effective Date, Iinformation Provider
shall complete their pieces of the contractual
agreements related to the Design and Implementation of
the area.
2.1.3 Additional Content. In the event that Information
Provider wishes to offer any categories or types of
content, including advertising, information, Products,
services or materials in addition to those itmes
specifically described above (the "Additional Content"),
Information Provider shall notify AOL in writing.
Information Provider's right to offer any such
Additional Content shall be subject to AOL's prior
written approval. Additional Content approved by AOL
shall be memorialized in sequentially numbered addenda
to this Agreement. A new deal may be necessary if
revenue generating services are added to area, such as
advertising. Approval is absolutely at AOL's discretion.
3
2.1.4 License. Information Provider hereby grants AOL a
non-exclusive worldwide license to market, license,
distribute, display, perform, transmit and promote the
Online Area contained therein through the AOL Network.
AOL Members and/or GNN Users, at AOL's sole option,
shall have the right to access and use the Online Area.
Subject to such license, Information Provider retains
all right, title to and interest in the Licensed C&S.
2.1.5 Management of Online Area. Information Provider shall
manage, review, delete, edit, create, update and
otherwise manage all content and services available on
or through the Online Area, including but not limited to
the Licensed C&S and message boards, in a timely and
professional manner and in accordance with the terms of
this Agreement and AOL's applicable Terms of Service.
Information Provider shall ensure that the Online Area
is current, accurate and well-organized at all times.
Except for any specific management obligations described
in Exhibit A, AOL shall have no obligations with respect
to the content and services available on or through the
Online Area, including, but not limited to, any duty to
review or monitor any such content and services.
2.1.6 Lowest Price Guarantee. Information Provider shall
guarantee AOL Members and GNN Users that in no event
will the prices for Products in the Online Area exceed
prices for identical Products offered by Information
Provider in any other forum, including but not limited
to catalogues and retail stores.
2.1.7 Access Equipment. Information Provider shall provide all
computer, telephone and other equipment or resources
necessary for Information Provider to access the AOL
Network except for the AOL Proprietary client software
necessary to access the AOL Network and the Information
Provider Tools to be provided by AOL pursuant to Section
2.2.4 herein.
2.1.8 Duty to Inform. Information Provider shall promptly
inform AOL of any information related to the Online Area
which could reasonably lead to a claim, demand, or
liability of or against AOL and/or its Affiliates by any
third party.
2.1.9 Promotion Responsibilities. Information Provider shall
use commercially reasonable efforts to market the Online
Area, and such efforts shall at a minimum, include the
following responsibilities (in addition to compliance
with Section 2.3.1 below):
4
2.1.9.1 Cooperate with and reasonably assist AOL in
supplying material for AOL's marketing and
promotional activities which relate to the
Online Area;
2.1.9.2 Perform Information Provider's New Member
acquisition obligations set forth in Exhibit B.
2.1.9.3 Prepare an annual Product marketing plan and
budget (the "Merchandise Marketing Plan") for
promoting the Online Area, including but not
limited to Product selection and rotation, sales
and special promotions. Upon notice from AOL and
at AOL's option, the Merchandise Marketing Plan
shall be reviewed and approved by AOL for the
Initial Term prior to the Commercial Launch date
and for each successive Contract Year prior to
the commencement of such Contract Year.
2.1.10 Overhead Accounts. Information Provider shall be granted
a reasonable and necessary number of Overhead Accounts
for the exclusive purpose of enabling it and its agents
to perform Information Provider's duties under this
Agreement. Information Provider shall 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 Information
Provider, but Information Provider shall 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 shall bear. Upon the
termination of this Agreement, all Overhead Accounts,
related screen names and any associated usage credits or
similar rights, shall automatically terminate. AOL shall
have no liability for loss of any data or content
related to the proper termination of any Overhead
Account.
2.1.11 Customer Service. It is the sole responsibility of
Information Provider to provide customer service to
persons or entities purchasing Products including but
not limited to AOL Members and GNN Users ("Customers")
regarding any Products and any transactions related
thereto. In addition to complying with the Customer
Service Requirements set forth in Exhibit C, and any
changes thereto that AOL may make from time to time,
Information Provider shall respond promptly and
professionally to questions, comments, complaints and
other reasonable requests from Customers regarding the
Products. Information Provider shall ensure that all
orders of Products are received, processed, shipped and
delivered on a timely and professional basis, with no
less than seventy percent (70%) of orders filled within
five (5) days from the date of order. Information
Provider shall bear all responsibility for compliance
with federal, state and local laws in the event the
Products are out of stock or are no longer available at
the time an order is received. Title to Product(s) shall
remain in Information Provider and shall be transferred
directly from Information Provider to the Customers.
Payment for Information Provider Product(s) shall be
collected by Information Provider directly from
Customer. Information Provider shall bear the entire
economic risk of shipment and payment for Information
Provider Product(s). Information Provider's order
fulfillment operation shall be subject to AOL's review
and approval.
5
2.1.12 Disclaimers. Information Provider agrees that a product
disclaimer in substantially the following form will be
displayed in any online store contained within the
Online Area (with "Information Provider" replaced by
Information Provider's name in each place "Information
Provider appears):
"AOL AND ITS AFFILIATES WILL NOT BE A PARTY TO
ANY TRANSACTION BETWEEN ANY PURCHASER AND
INFORMATION PROVIDER, AND ALL ASPECTS OF SUCH
TRANSACTIONS INCLUDING BUT NOT LIMITED TO
PURCHASE TERMS, PAYMENT TERMS, WARRANTIES,
GUARANTEES, MAINTENANCE, AND DELIVERY ARE SOLELY
BETWEEN PURCHASER AND INFORMATION PROVIDER. AOL
AND ITS AFFILIATES PROVIDE NO GUARANTEES OR
WARRANTIES, EXPRESS OR IMPLIED, REGARDING THE
QUALITY, MAKE, OR PERFORMANCE OF THE PRODUCTS OR
SERVICES AVAILABLE THROUGH THIS AREA. GUARANTEES
OR WARRANTIES, IF ANY, ARE DIRECTLY BETWEEN
INFORMATION PROVIDER OR CATALOGER AND THE
PURCHASER."
2.1.13 Taxes. Information Provider shall collect and pay and
indemnify and hold AOL harmless from, any sales, use,
excise, import or export value added or similar tax or
duty not based on AOL's net income, including any
penalties and interest, as well as any costs associated
with the collection or withholding thereof, including
attorneys' fees.
2.1.14 Shipping and Handling. In connection with any Product
ordered through the AOL Network or CD-ROM (if any),
Information Provider may not require the purchaser to
pay shipping, handling or similar charges ("S&H
Charges") in excess of twenty percent (20%) above of
Information Provider's actual shipping and handling
costs related to such order unless Information Provider
pays AOL twenty-five percent (25%) of the total S&H
Charges which the purchaser is required to pay. In no
event shall Information Provider impose shipping and
handling costs in excess of fifty percent (50%) above
Information Provider's actual shipping and handling
costs.
2.1.15 Chat Management Class. If the Online Area will include
chat, Information Provider shall register for and
successfully complete the chat management class offered
online by AOL prior to Commercial Launch.
2.1.16 Technical Conformance. Information Provider shall take
all reasonable steps necessary to conform its promotion
and sale of Products through the Online Area to the
then-existing commerce technologies made available to
Information Provider by AOL.
6
2.1.17 Additional Transaction Mechanisms. Information Provider
shall only be permitted to promote and/or offer Products
to be sold through the Online Area using AOL's
then-available "clerk" transaction tools ("Standard
Clerk Tools"). To the extent Information Provider wishes
to promote or make available throughout the Online Area
alternative means for purchase of Products, including
without limitation, surcharged downloads, toll-free
numbers, catalogues and form-driven mail (each an
"Alternative Transaction Mechanism"), Information
Provider must obtain AOL's prior written approval. In
order to obtain AOL's approval, Information Provider
must submit to AOL a written proposal describing the
Alternative Transaction Mechanism and Information
Provider's plan for reporting information to AOL
regarding sales occurring through such Alternative
Transaction Mechanism. In the event AOL approves any
such Alternative Transaction Mechanism, the sales
occuring through such means shall also be subject to
Section 3.2.1
2.1.18 Internet Areas. Information Provider shall not be
permitted to establish any links between the Online Area
and any other area on or outside of the AOL Network,
including, without limitation, sites on the World Wide
Web portion of the Internet, without the prior written
approval of AOL. In the event that AOL approves any such
links or pointers, such approval shall, in each case, be
subject to AOL's then-current fees for such links or
pointers and Information Provider's compliance with the
then-current terms and conditions, as they may be
amended by AOL from time to time.
2.2 DUTIES AND RIGHTS OF AOL. In connection with the online Area,
AOL shall have the following duties and rights:
2.2.1 Listing and Promotion of Online Area. AOL shall list the
Online Area in the "Directory of Services," an index of
the online areas available on the America Online (R)
brand service, or any similar area as designated by AOL
available on the AOL Network. AOL shall list the Online
Area for an initial period of at least one month in the
"What's New" Area, a listing of new online areas
available on the America Online brand service, or any
similar area on the AOL Network; provided that the
scheduling, frequency, size and nature of any such
promotions shall be subject to AOL's sole editorial
discretion. AOL shall be entitled, in its reasonable
discretion, to list, promote and offer individual
Products or specific subsets of Products through
features within the AOL Network managed and maintained
by AOL, its Affiliates or their agents, including
without limitiation, special gift collections and
product search services. In the event such listings,
promotions or offers involve text or multimedia
descriptions which differ from the descriptions
appearing within the Online Area, such modified
descriptions shall be subject to the prior approval of
Information Provider, which shall not be unreasonably
withheld or delayed.
7
2.2.2 TECHNICAL SUPPORT AND DOCUMENTATION. AOL shall provide
Information Provider a reasonable level of technical
support and documentation necessary to enable
Information Provider to perform its duties under this
Agreement.
2.2.3 INFORMATION PROVIDER TOOLS. AOL grants Information
Provider a non-exclusive, royalty-free license during
the Initial Term and any Contract Year of this Agreement
to use publishing tools, which are made generally
available by AOL to its third party information
providers, solely to be used in connection with
performing the duties of Information Provider under this
Agreement. Information Provider recognizes that AOL
provides to Information Provider all such publishing
tools on an "as is" basis, without warranties of any
kind.
2.2.4 AOL LOOK AND FEEL. Information Provider acknowledges and
agrees that AOL shall own all right, title and interest
in and to the AOL Look and Feel, subject to Information
Provider's ownership rights in the Licensed C&S.
2.2.5 POINTING. AOL shall be entitled, in its reasonable
discretion, to establish "pointers" (or links) between
components of content contained within the Online Area
and other content areas available through the AOL
Network.
2.3.5 CD-ROM PRODUCTS. In the event that AOL elects to develop
a CD-ROM product, AOL shall have the option to include
all or a portion of Information Provider's Licensed C&S
on such CD-ROM.
2.3 JOINT DUTIES AND RIGHTS OF THE PARTIES.
2.3.1 PROMOTIONAL MATERIALS/PRESS RELEASES. Each Party will
submit to the other Party, for its prior written
approval, which shall not be unreasonably withheld or
delayed, any marketing, advertising, press releases, and
all other promotional materials related to the Online
Area and/or referencing the other Party and/or its trade
names, trademarks, and service marks (the "Materials");
provided, however, that screen shots of the Online Area
shall not require prior approval and shall be deemed
approved. Each Party shall solicit and reasonably
consider the views of the other Party in designing and
implementing such Materials. Once approved, the
Materials may be used by a Party and its affiliates for
the purpose of promoting the Online Area 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 shall be provided to the other Party.
8
2.3.2 TRADEMARK LICENSE. In designing and implementing the
Materials and subject to the other provisions contained
herein, Information Provider shall be entitled to use
the following trade names, trademarks, and service marks
of AOL: the "America Online(Reg. TM)" brand service,
"AOL(TM)" service/software and AOL's triangle logo; and
AOL and its Affiliates shall be entitled to use the
trade names, trademarks, and service marks of
Information Provider (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.
2.3.2.1 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 shall 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.
2.3.2.2 QUALITY STANDARDS. Each Party agrees that the
nature and quality of its products and services
supplied in connection with the other Party's
Marks shall conform to quality standards 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 shall comply
with all applicable laws, regulations, and
customs and obtain any required government
approvals pertaining to use of the other Party's
marks.
2.3.2.3 INFRINGEMENT PROCEEDINGS. Each Party agrees to
promptly notify the other Party of any
unauthorized use of the other Party's Marks of
which it has actual knowledge. Each Party shall
have the sole right and discretion to bring
proceedings alleging infringement of its Marks
or unfair competition related thereto; provided,
however, that each Party agrees to provide the
other Party with its reasonable cooperation and
assistance with respect to any such infringement
proceedings.
2.3.3 AUDITING RIGHTS. Each Party shall maintain complete,
clear and accurate 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, each Party shall 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 the
other Party which are relevant to amounts payable to AOL
pursuant to this Agreement. Any such audit may be
conducted after twenty (20) business days prior written
notice, subject to the following. Such audits shall not
be made more frequently than once every twelve months.
No such audit of AOL shall occur during the period
beginning on June 1 and ending October 1.
9
2.3.4 REPORTING. In addition to the reports required by
Section 3, Payments, hereof, the parties shall exchange
the following information regarding commerce within the
Online Area:
2.3.4.1 FRAUDULENT TRANSACTIONS. Information Provider
shall provide AOL with an immediate report of
any fraudulent order, including the date, screen
name and amount associated with such order.
2.3.4.2 BAD DEBT AND RETURNS. Information Provider shall
provide AOL with monthly reports of any Product
returns, including the date of the sale and
return and the amount of the transaction. Any
account receivable from a transaction in the
Online Area not paid within 30 days by the AOL
Member and/or GNN User shall be deemed "Bad
Debt". Information Provider shall provide AOL
with monthly reports of Bad Debt.
3. PAYMENTS.
3.1 SALES REVENUES. Information Provider shall pay AOL [certain
confidential information has been omitted and filed separately
with the Commission pursuant to a Request for Confidential
Treatment] of all Sales Revenues, based on invoices prepared by
AOL. Payment shall include documentation verifying any reduction
in the invoiced amount, including but not limited to returns.
3.2 DESIGN AND/OR PRODUCTION FEE. Information Provider shall pay AOL
for AOL's services in connection with the initial design and
construction of the Online Area, any redesign of the Online Area
and any other production services provided by AOL, in accordance
with Exhibit A.
3.3 MANAGEMENT FEE. Information Provider shall pay AOL for
Management services in accordance with Exhibit A.
3.4 PAYMENT SCHEDULE. Each Party agrees to pay the other Party all
amounts received and owed to such other Party as described
herein within thirty (30) days of the end of the month in which
such amounts were collected by such Party together with a
written report signed by an authorized agent of the Party
setting forth a description of the applicable usage, sales,
advertising, merchandise revenues and/or royalties in detail
sufficient to support the calculations of the amounts paid.
10
4. REPRESENTATIONS AND WARRANTIES.
4.1 AOL. AOL represents and warrants to Information Provider that
(i) the America Online(Reg. TM) brand service is a functional
online computer network accessible to AOL Members, and (ii)
AOL's proprietary client software used by AOL Members to access
the AOL Network does not infringe on any copyright, U.S. patent
or any other proprietary right of any third party.
4.2 INFORMATION PROVIDER. Information Provider represents and
warrants to AOL that it is familiar with the America Online(Reg.
TM) brand service and the Global Network Navigator brand service
and that the Online Area (i) conforms and will conform to the
description set forth in Section 2.1.1; (ii) will conform to
AOL's applicable Terms of Service, (iii) will not infringe on or
violate any copyright, U.S. patent or any other right of any
third party; and (iv) will not contain any content, materials or
services which violate any applicable law or regulation.
4.3 MUTUAL. 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.
5. 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 shall take reasonable steps, at least
substantially equivalent to the steps it takes to protect its own
proprietary information, during the Initial Term, any Contract Year, 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 shall each agree to comply with
this Section 5 of this Agreement.
6. SOLICITATION/PROMOTION
6.1 SOLICITATION OF SUBSCRIBERS. During the Initial Term and any
Contract Year, and for the two-year period following the
expiration or termination of this Agreement, neither Information
Provider nor its agents will use the AOL Network to (i) solicit,
or participate in the solicitation of AOL Members or GNN Members
when that solicitation is for the benefit of any entity
(including Information Provider) 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 (other than an Internet Area
subject to a pointing arrangement established pursuant to
Section 2.3.4 above). In addition, Information Provider agrees
and acknowledges that it shall only be entitled to send
solicitations or other communications to AOL Members or GNN
Members ("Member Communications") who have affirmatively
requested the particular Member Communication in question from
Information Provider (i.e., no unsolicited mailings or
communications shall be permitted).
11
6.2 COLLECTION OF MEMBER INFORMATION. Information provider shall
ensure that any survey, questionnaire or other vehicle for
collecting Member Information (an "Information Request")
complies with (i) all applicable laws and regulations, (ii)
AOL's Terms of Service, and (iii) any privacy policies which
have been issued by AOL in writing to Information Provider. Each
Information Request shall specify the manner in which Member
Information collected through the Information Request shall be
used (the "Specified Purpose").
6.3 USE OF MEMBER INFORMATION. Information Provider shall restrict
use of the Member Information collected through an Information
Request to the Specified Purpose. In no event shall Information
Provider (i) provide AOL Member or GNN Member names, screen
names, addresses or other identifying information ("Member
Information") to any third party in a manner which identifies
AOL Members or GNN Members as subscribers to AOL, an online
service or the equivalent or (ii) otherwise use any Member
Information in contravention of Section 6.1 above.
7. LIMITATION OF LIABILITY; DISCLAIMER; INDEMNIFICATION.
7.1 LIABILITY. UNDER NO CIRCUMSTANCES SHALL EITHER PARTY BE LIABLE
TO THE OTHER PARTY FOR INDIRECT, INCIDENTAL, CONSEQUENTIAL,
SPECIAL OR EXEMPLARY DAMAGES (EVEN IF THAT PARTY HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES), ARISING FROM THE
USE OR INABILITY TO USE THE AOL NETWORK OR ONLINE AREA OR ANY
OTHER PROVISION OF THIS AGREEMENT, SUCH AS, BUT NOT LIMITED TO,
LOSS OF REVENUE OR ANTICIPATED PROFITS OR LOST BUSINESS. EXCEPT
AS PROVIDED IN SECTION 7.3, NEITHER PARTY SHALL BE LIABLE TO THE
OTHER PARTY FOR MORE THAN THE AGGREGATE AMOUNTS PAID TO
INFORMATION PROVIDER BY AOL UNDER THIS AGREEMENT.
7.2 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 OR THE ONLINE
AREA, 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 ONLINE
AREA.
7.3 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.
12
7.4 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 Information
Provider hereunder, and in such event, Information Provider
shall have no further obligation to provide indemnification for
such matter hereunder.
8. VIOLATION OF AOL TERMS OF SERVICE. AOL shall have the right to remove,
or direct Information Provider to remove, any information, statements or
other material or content which, as reasonably determined by AOL,
violates AOL's then applicable Terms of Service.
9. TERM, RENEWAL AND TERMINATION.
9.1 TERM; RENEWAL; NONRENEWAL. Unless earlier terminated as set
forth herein, the initial term of this Agreement shall be
through December 31, 1997 from the Effective Date ("Initial
Term"). This Agreement shall be automatically extended for
successive one year periods (each a "Contract Year") unless the
Agreement has been terminated in accordance with the following,
or unless either Party notifies the other in writing of its
election to have the Agreement expire at least thirty (30) days
in advance of the end of the Initial Term or any subsequent
Contract Year.
9.2 TERMINATION BY EITHER PARTY. Either Party may terminate this
Agreement at any time in the event of a material breach by the
other Party which remains uncured after thirty (30) days written
notice thereof.
9.3 TERMINATION BY AOL FOR CAUSE. AOL may, upon thirty (30) days
written notice to Information Provider, terminate this Agreement
if, commencing with the twelfth month after the Commercial
Launch date, total monthly revenues to AOL from the Online Area
is less than [certain confidential information has been omitted
and filed separately with the Commission pursuant to a Request
for Confidential Treatment] per month for any 3 consecutive
months during the term of this Agreement.
10. GENERAL PROVISIONS.
10.1 EXCUSE. Neither Party shall be liable for, or be considered in
breach of or default under this Agreement on account of, any
delay or failure to perform as required by this Agreement as a
result of any causes or conditions which are beyond such Party's
reasonable control and which such Party is unable to overcome by
the exercise of reasonable diligence.
13
10.2 INDEPENDENT CONTRACTORS. The Parties to this Agreement are
independent contractors. Neither Party is an agent,
representative, or partner of the other Party. Neither party
shall have any right, power or authority to enter into any
agreement for or on behalf of, or incur any obligation or
liability of, or to otherwise bind, the other Party. This
Agreement shall not be interpreted or construed to create an
association, agency, joint venture or partnership between the
Parties or to impose any liability attributable to such a
relationship upon either Party.
10.3 NOTICE. Any notice, approval, request, authorization, direction
or other communication under this Agreement shall be given in
writing and shall be deemed to have been delivered and given for
all purposes (i) on the delivery date if delivered by electronic
mail on the AOL Network; (ii) on the delivery date if delivered
personally to the Party to whom the same is directed; (iii) one
business day after deposit with a commercial overnight carrier,
with written verification of receipt, or (iv) five business days
after the mailing date, whether or not actually received, if
sent by U.S. mail, return receipt requested, postage and charges
prepaid, or any other means of rapid mail delivery for which a
receipt is available, to the address of the Party to whom the
same is directed as set forth below.
AMERICA ONLINE INFORMATION PROVIDER
[Address, Fax, E-mail] [Address, Fax, E-mail]
With copy to:
Xxxxx X. Xxxxx, Esq.
Vice President and General Counsel
America Online, Inc.
0000 Xxxxxxxx Xxxxxx Xxxxx
Xxxxxx, XX 00000-0000
XXxxxx@XXX.XXX
10.4 NO WAIVER. The failure of either Party to insist upon or enforce
strict performance by the other Party of any provision of this
Agreement or to exercise any right under this Agreement shall
not be construed as a waiver or relinquishment to any extent of
such Party's right to assert or rely upon any such provision or
right in that or any other instance; rather, the same shall be
and remain in full force and effect.
10.5 RETURN OF INFORMATION. Upon the expiration or termination of
this Agreement, each Party shall promptly return all
information, documents, manuals and other materials belonging to
the other Party except as otherwise provided in this Agreement.
10.6 SURVIVAL. Sections 3, 5, 6, 7 and 10.5 shall survive the
completion, expiration, termination or cancellation of this
Agreement.
14
10.7 ENTIRE AGREEMENT. This Agreement sets forth the entire
agreement, and supersedes any and all prior agreements of the
Parties with respect to the transactions set forth herein.
Neither Party shall be bound by, and each Party specifically
objects to, any term, condition or other provision which is
different from or in addition to the provisions of this
Agreement (whether or not it would materially alter this
Agreement) and which is proffered by the other Party in any
correspondence or other document, unless the Party to be bound
thereby specifically agrees to such provision in writing.
Notwithstanding the foregoing, Information Provider shall also
be bound by the Terms of Service except as such Terms of Service
are specifically amended by this Agreement.
10.8 AMENDMENT. No change, amendment or modification of any provision
of this Agreement shall be valid unless set forth in a written
instrument signed by both Parties.
10.9 FURTHER ASSURANCES. Each Party shall take such action
(including, but not limited to, the execution, acknowledgment
and delivery of documents) as may reasonably be requested by any
other Party for the implementation or continuing performance of
this Agreement.
10.10 ASSIGNMENT. Information Provider shall not assign (voluntarily,
by operation of law or otherwise) this Agreement or any right,
interest or benefit under this Agreement without the prior
written consent of AOL. Subject to the foregoing, this Agreement
shall be fully binding upon, inure to the benefit of and be
enforceable by the Parties hereto and their respective
successors and assigns.
10.11 CONSTRUCTION. 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, such
provision shall be deemed to be restated to reflect as nearly as
possible the original intentions of the Parties in accordance
with applicable law, and the remainder of this Agreement shall
remain in full force and effect.
10.12 APPLICABLE LAW; JURISDICTION. This Agreement shall be
interpreted, construed and enforced in all respects in
accordance with the laws of the Commonwealth of Virginia except
for its conflicts of laws principles. 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.
10.13 COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall be deemed an original and all of which
together shall constitute one and the same document.
15
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of
the Effective Date.
AMERICA ONLINE, INC. CYBERSHOP
By: /s/ Xxxx Xxxxxx By: /s/ Xxxxxxx Xxxxxx
------------------------- -------------------------
Xxxx Xxxxxx Xxxxxxx Xxxxxx
Print Name: Xxxx Xxxxxx Print Name:Xxxxxxx Xxxxxx
Title: Director, Business Development Title: President
Date: 8/17/96 Date: 8/7/96
Tax ID/EIN#: NJ4-002-158-000
EXHIBIT A
SERVICES
1. INTRODUCTION. AOL will be have the following responsibilities with respect
to the design, development, construction and/or Management of the Online
Areas (the "Services"). Information Provider will provide AOL with the
Licensed C&S and other content and services for distribution on the Online
Areas. The Licensed C&S will be provided in media mutually agreed to by the
Parties.
2. DEVELOPMENT OF THE ONLINE AREAS. From and after the Effective Date,
Information Provider shall prepare and submit to AOL drafts of its Design
Package. The Design Package shall contain final artwork and designs for the
Online Area. In the event that the Online Area does not conform to the
Design Package, AOL shall have the right to remove, or direct Information
provider to remove such non-conforming content. AOL will, in consultation
with Information Provider, undertake the following responsibilities with
respect to development of the Design Package and production of the Online
Area:
3. PAYMENT. Information Provider shall pay AOL $0.00 for the design and/or
production services described above as follows: Cybershop will be
responsible for design. Approval as stated above. AOL will be responsible
for build. Following the initial design, production and launch, any
redesign costs to be determined based on costs as given by Production team
at time of redesign request. Design is extra based on who and if AOL if
doing the design.
4. ACCOUNT MANAGEMENT SERVICES. AOL will provide the following online
management services for a period not to exceed 0 months, and will be paid
$0.00 dollars per month for such services: none, Cybershop will manage
their area.
5. INFORMATION PROVIDER'S MANAGEMENT RESPONSIBILITIES. Information Provider
shall attend AOL "rainman" classes, or its successor, to prepare
Information Provider for taking over the management function of the Online
Area at the end of AOL's obligation in paragraph 4 above. Information
Provider's failure to assume management of the Online Area by launch may be
grounds for termination of this Agreement by AOL, at AOL's option.
6. OTHER PROVISIONS RELATED TO THE DELIVERY OF SERVICES.
6.1 Information Provider Cooperation. Information Provider shall cooperate
with AOL by, among other things, making available, as reasonably
requested by AOL, management decisions, responsive information and
approvals to enable AOL to provide the Services.
6.2 Intellectual Property. Notwithstanding anything to the contrary
herein, and subject to any trademark, service xxxx, tradename,
copyright or other preexisting right owned by Information Provider in
the Licensed C&S, AOL shall retain all ownership rights in any work
product, technology, idea, concept, procedure or graphic, whether
reduced to writing or not, arising out of or related to AOL's
performance of the services described in Exhibit A ("Work Product").
The parties hereto expressly agree that such Work Product is not a
"work for hire" and Information Provider agrees to provide any
reasonably requested assistance to secure AOL's rights in such Work
Product.
17
6.3 AOL's agreement to assist in the design, creation, production and/or
management of the Online Area shall not limit in any respect
Information Provider's obligations to supply all Licensed C&S to be
included within the Online Area and to comply with any other
requirements relating to the Online Area set forth in this Agreement.
7. ADDITIONAL SERVICES. Should Information Provider require services from AOL
which are different from or in addition to the Services, including without
limitation, any production services in connection with a substantial and
material redesign of or addition to the Online Area (e.g., a change to an
existing screen format or construction of a new custom form) ("Additional
Services"), Information Provider shall provide AOL with detailed written
specifications covering the requested services (the "Specs"). Following
receipt of the final Specs, AOL shall notify Information Provider of (i)
the proposed fee for performing the Additional Services and (ii) the
development schedule for performance of such Additional Services.
18
EXHIBIT B
MEMBER ACQUISITION
when applicable, to be negotiated
19
EXHIBIT C
CUSTOMER SERVICE REQUIREMENTS
1. Receive orders electronically to process orders within 24 hours of receipt.
2. Deliver all merchandise in professional packaging. All packages should
arrive undamaged, well packed and neat (barring any shipping disasters).
3. Dedicated Customer Service personnel to be responsible for on-line medium.
In other words, there should be people whose primary concern is the on-line
customer's orders. Quite often the on-line customer is given a lower
priority in the fulfillment area, they need to be given as much priority as
the rest of your business.
4. Receive and respond to e-mails within 24 hours of receipt via a computer
available to the customer service staff.
5. Provide the customer with an order confirmation within 24 hours of receipt.
Order confirmation should include any information such order status
(temporary back order or out of stock situations), and expected delivery
times.
6. Ability to handle volumes in excess of 25% to 50% of your average daily
order volumes.
7. Monitor on-line store to minimize/eliminate out of stock merchandise
available.
8. Ship the displayed product at the price displayed without substituting.
9. Stellar Customer service policies- "The Customer is always Right, even when
he/she is not". The commitment to provide each customer with a win/win
experience.
10. Complete details on your customer service policies posted in your on-line
customer service area including: Shipping Information, Return Policies,
Warranty Information, and Contact Information.
ADDENDUM TO INTERACTIVE MARKETING AGREEMENT
This Addendum, dated as of September 1, 1997, is made and entered into by
and between America Online, Inc. ("AOL"), and Cybershop, LLC ("MERCHANT").
Defined terms that are used but not defined herein shall be as defined in the
interactive marketing agreement between AOL and Merchant dated as of August 17,
1996 (the "Agreement").
The parties wish to amend the Agreement; it is therefore agreed as follows:
1. Promotional Placement. AOL shall provide promotional placement (the
"Promotion") for MERCHANT's site on the World Wide Web or (as the case may be)
for MERCHANT's area on the U.S. America Online (R) brand service (the "AOL
Service") in the redesigned AOL "Shopping Channel," commencing on the date AOL
makes such channel generally available to AOL Members (the "Shopping Channel
Launch Date"). MERCHANT's Promotion is described on the attached Exhibit A.
2. Payments. Upon execution of the Addendum, MERCHANT shall pay AOL a
placement fee of [certain confidential information has been omitted and filed
separately with the Commission pursuant to a Request for Confidential
Treatment] The placement fee shall be payable in twelve (12) equal monthly
installments, with the first such payment to be made upon the Effective Date and
subsequent monthly payments to be made on the first day of each subsequent
month. Commencing on the earlier of September 1, 1997, or the Shopping Channel
Launch Date. MERCHANT shall no longer be required pursuant to the Agreement to
pay AOL any portion of MERCHANT's transaction or sales revenues generated
subsequent to such commencement date.
3. Extension. The Agreement shall continue in full force and effect until
December 31, 1998 (the "Extension Period"), and shall terminate automatically
upon expiration of the Extension Period (unless it is further extended by mutual
written agreement of the parties or terminated early in accordance with the
terms of the Agreement and the Standard Terms).
4. Merchant Changes. MERCHANT may change the artwork on it's Tenancy button in
the Shopping Channel as often as required but only as it reflects changes to
MERCHANT Company's permanent logo or store name, provided that MERCHANT shall
pay AOL the standard costs for performing such changes. Artwork changes will not
be permitted to accommodate short-term alterations that are promotional in
nature as determined by AOL at it's sole reasonable discretion. Additionally,
MERCHANT may change it's store position within the Shopping Channel as mutually
agreed by the parties and based on space availability in desired location.
5. Order of Precedence; Standard Terms. This Addendum is supplementary to and
modifies the Agreement. This Addendum incorporates by reference AOL's standard
terms and conditions for participation in the Shopping Channel (the "Standard
Terms"), including without limitation terms related to production procedures,
payment modifications, customer service, site optimization, termination and
miscellaneous legal terms. The Standard Terms appear at keyword "Standard
Shopping Channel Terms" on the AOL Service. A hard copy of the Standard Terms
will be provided to MERCHANT upon request. MERCHANT acknowledges that it has
been provided an opportunity to review the Standard Terms and agrees to be bound
by certain Standard Terms as follows. The Standard terms and the terms of this
Addendum supersede provisions in the Agreement only to the extent that the terms
of this Addendum (and/or the Standard Terms, as the case may be) expressly
conflict with the terms of the Agreement. However, nothing in this Addendum or
the Standard Terms should be interpreted as invalidating the Agreement, and
provisions of the Agreement will continue to govern relations between the
parties to the extent that they do not expressly conflict with this Addendum or
the Standard Terms.
6. Counterparts. This Addendum may be executed in counterparts, each of which
shall be deemed an original and all of which together shall constitute one and
the same document.
20
IN WITNESS WHEREOF, the parties hereto have executed this Addendum as of the
date first written above.
AMERICA ONLINE, INC. Cybershop, LLC
By: /s/ Xxxxx Xxxx By: /s/ Xxxxxxx Xxxxxx
------------------ ----------------------
Name: Xxxxx Xxxx Name: Xxxxxxx Xxxxxx
---------------- --------------------
Title: Director of Operations Title: President
----------------------------- ----------------
Date: 9-8-97 Date: 8-28-97
------------ -------------
ADDENDUM TO INTERACTIVE MARKETING AGREEMENT
This Addendum, dated as of October 1, 1997, is made and entered into by and
between America Online, Inc. ("AOL"), and Cybershop, LLC ("MERCHANT"). Defined
terms that are used but not defined herein shall be as defined in the
interactive marketing agreement between AOL and Merchant dated as of August 17,
1996 (the "Agreement").
The parties wish to amend the Agreement; it is therefore agreed as follows:
1. Promotional Placement. AOL shall provide promotional placement (the
"Promotion") for MERCHANT's site on the World Wide Web or (as the case may be)
for MERCHANT's area on the U.S. America Online (R) brand service (the "AOL
Service") in the redesigned AOL "Shopping Channel," commencing on the date AOL
makes such channel generally available to AOL Members (the "Shopping Channel
Launch Date"). MERCHANT's Promotion is described on the attached Exhibit A.
2. Payments. Upon execution of the Addendum MERCHANT shall pay AOL a placement
fee of [certain confidential information has been omitted and filed separately
with the Commission pursuant to a Request for Confidential Treatment] The
placement fee should be payable in 12 monthly installments, with the first such
payment to be made on the first day of January 1, 1998 and subsequent payments
to be made on the first day of each subsequent month.
3. Extension. The Agreement shall continue in full force and effect until
December 31, 1998 (the "Extension Period"), and shall terminate automatically
upon expiration of the Extension Period (unless it is further extended by mutual
written agreement of the parties or terminated early in accordance with the
terms of the Agreement and the Standard Terms).
4. Merchant Changes. MERCHANT may change the artwork on it's Anchor button in
the Shopping Channel as often as required but only as it reflects changes to
MERCHANT Company's permanent logo or store name, provided that MERCHANT shall
pay AOL the standard costs for performing such changes. Artwork changes will not
be permitted to accommodate short-term alterations that are promotional in
nature as determined by AOL at it's sole discretion. Additionally, MERCHANT may
change it's store position with the Shopping Channel as mutually agreed by the
parties and based on space availability in desired location.
5. Order of Precedence; Standard Terms. This Addendum is supplementary to and
modifies the Agreement. This Addendum incorporates by reference AOL's standard
terms and conditions for participation in the Shopping Channel (the "Standard
Terms"), including without limitation terms related to production procedures,
payment modifications, customer service, site optimization, termination and
miscellaneous legal terms. The Standard Terms appear at keyword "Standard
Shopping Channel Terms" on the AOL Service. A hard copy of the Standard Terms
will be provided to MERCHANT upon request. MERCHANT acknowledges that it has
been provided an opportunity to review the Standard Terms and agrees to be bound
by certain Standard Terms as follows. The Standard terms and the terms of this
Addendum supersede provisions in the Agreement only to the extent that the terms
of this Addendum (and/or the Standard Terms, as the case may be) expressly
conflict with the terms of the Agreement. However, nothing in this Addendum or
the Standard Terms should be interpreted as invalidating the Agreement, and
provisions of the Agreement will continue to govern relations between the
parties to the extent that they do not expressly conflict with this Addendum or
the Standard Terms.
6. Counterparts. This Addendum may be executed in counterparts, each of which
shall be deemed an original and all of which together shall constitute one and
the same document.
IN WITNESS WHEREOF, the parties hereto have executed this Addendum as of the
date first written above.
EXHIBIT A
PROMOTIONAL PLACEMENT - ANCHOR
MERCHANT shall become an "Anchor" in the Department Stores department of the AOL
shopping channel. As an Anchor, MERCHANT shall be entitled to the following:
o One continuous (24/7) button with corporate brand or logo on the department
front screen. MERCHANT will assume the 3rd position.
o One continuous (24/7) two-line text add to promote individual product
offerings.
o Featured product with text promotion for five days per month minimum on the
relevant department screen.
o Rotation through the shopping channel search screen advertising banners
along with all other Anchors and Tenants.
o One keyword for trade name or trademark (subject to availability)
o Participation in the following programs at no additional charge:
o Electronic Order Blank Area
o Bargain Basement
o Quick Gifts
o Event and/or theme areas (e.g., Christmas Shop)
In addition:
A guaranteed [certain confidential information has been omitted and filed
separately with the Commission pursuant to a Request for Confidential
Treatment] in banner advertising as AOL locations based on AOL's standard
advertising rate card (locations and any reasonably necessary adjustments to
timing of delivery of impressions to be mutually agreed upon by Advertiser and
AOL).
AMERICA ONLINE, INC. Cybershop, LLC
By: /s/ Xxxxx Xxxx By: /s/ Xxxxxxx Xxxxxx
------------------ ----------------------
Name: Xxxxx Xxxx Name: Xxxxxxx Xxxxxx
---------------- --------------------
Title: Director of Operations Title: President
----------------------------- ----------------
Date: 10-15-97 Date: 9-24-97
------------ -------------
