Interactive Marketing Agreement - American Online Inc. and americangreetings.com inc.
CONFIDENTIAL
INTERACTIVE MARKETING AGREEMENT
-------------------------------
This Interactive Marketing Agreement (together with all Exhibits,
Schedules and Annexes hereto, the "Agreement"), effective as of July 1, 1999
(the "Effective Date"), is between America Online, Inc. ("AOL"), a Delaware
corporation, with offices at 22000 AOL Way, Dulles, Virginia 20166, and
americangreetings.com, inc., a Delaware corporation ("AG Parent") and its
wholly-owned subsidiary, AG.Com, Inc., a Delaware corporation ("AGPI" and,
collectively with AG Parent, "AG"), both with offices at One American Road,
Cleveland, Ohio, 44144. AOL and AG may be referred to individually as a "Party"
and collectively as the "Parties."
INTRODUCTION
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AOL and AG each desires to enter into an interactive marketing
relationship whereby AOL will integrate, promote and distribute several
interactive sites referred to (and further defined) herein collectively as the
Customized Site. This relationship is further described below and is subject to
the terms and conditions set forth in this Agreement. Capitalized terms used but
not defined in the body of the Agreement are used herein as defined on Exhibit
B.
TERMS
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1. PROMOTION, DISTRIBUTION AND MARKETING.
1.1. AOL PROMOTION OF CUSTOMIZED SITE.
1.1.1. PROMOTIONS TO BE PROVIDED. During the Initial Term
(and, during the Term, only to the extent expressly
stated herein), AOL will provide AG with the
integration, placements, Promotions and Impressions
for the Customized Site described on Exhibit A and
Exhibit A-1. AOL will implement the Promotions,
including the Integrated Promotions in accordance
with and pursuant to a timeline established by AG in
consultation with AOL, pursuant to the Ramp-Up Period
referred to in Section 2.12, or the extent set forth
therein, at the times set forth on Exhibit A and
Exhibit A-1 (the "Integration Timeline"); provided
that failure to do so will not be considered a
breach, but shall be remedied in accordance with this
Section 1.1.1, Section 1.1.3 or 1.1.4 hereof, as
applicable. Subject to AG's prior written approval,
which approval shall not be unreasonably withheld,
AOL will have the right to fulfill particular
promotional commitments with respect to any of the
foregoing (other than those identified as "Mission
Critical") by providing AG comparable promotional
placements in appropriate alternative areas of the
AOL Network so long as such integration, placement
and Promotions continue to be carried out on the AOL
Network. AOL reserves the right to redesign or modify
the organization, structure, "look and feel,"
navigation and other elements of the AOL Network at
any time. In the event such modifications, in AG's
reasonable determination, materially and adversely
affect any specific Promotion or the overall level of
integration of Products within the AOL Network, AOL
will provide AG a promotional placement that is, as
mutually agreed, comparable. In addition, on an
ongoing basis, the Parties shall review the
performance of the Promotions and AOL reserves the
right to discontinue any Promotions that are
under-performing (except any Promotions identified as
"Mission Critical"), as reasonably determined with
AG's consent (not to be unreasonably withheld). Any
Promotion expressly designated in Exhibit A as a
"Permanent" Promotion shall not be removed for mere
Impressions overdelivery, but shall remain in place
during the Initial Term, subject to Section 1 or
Exhibit A-1, as applicable.
1.1.2. CONTENT OF PROMOTIONS. The Promotions will link only
to the Customized Site (including contextually
relevant areas therein) and will promote only the AG
Products described on Exhibit D and any additional,
substitute or modified AG Products as proposed by AG
and
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approved by AOL, such approval not to be unreasonably
withheld. The specific AG Content to be contained
within the Standard Promotions described in Exhibit A
(the "Standard Promo Content") will be determined by
AG, subject to AOL's technical limitations, the terms
of this Agreement and AOL's policies relating to
advertising and promotions. The specific Content to
be contained within the Integrated Promotions
described in Exhibit A (the "Integrated Promo
Content", and together with the Standard Promo
Content, the "Promo Content") will be determined (a)
to the extent the nature of such Content is related
to the marketing message (e.g., traditional ad copy),
by AG, subject to AOL's technical limitations, the
terms of this Agreement and AOL's policies relating
to advertising and promotions, and (b) to the extent
the nature of such Content is related to the
operation of the AOL Network or the manner or degree
of the implementation of integration therein, by AOL
in its reasonable editorial discretion, in
consultation with AG, and consistent with any express
integration requirements herein. AG and AOL will
jointly develop a quarterly online marketing plan
with respect to the Customized Site and the
Promotions. The Parties will meet in person or by
telephone at least monthly to review operations and
performance hereunder, including a review of the
Promo Content, Promotions, integration and carriage
plan 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 its reasonable editorial discretion (consistent
with the editorial composition of the applicable
screens).
1.1.3. MAKE UP FOR INTEGRATED PROMOTIONS. As used throughout
this Section 1.1.3 and in Section 1.1.4 below, in
determining the "comparable placement or value" of a
particular Promotion, the Parties shall negotiate in
good faith to mutually agree, based on a variety of
factors (including without limitation [
] In the event that the integration
necessary to implement the Integrated Promo Content
is not completed in accordance with the Integration
Timeline, and to the extent such failure is due to
the actions or inaction of AOL, then AOL shall have
[ ] full months thereafter to remedy such delay,
and, if after such[ ] month period AOL is unable
to so remedy, then the Parties shall cooperate in
good faith to mutually agree upon an alternative
Promotion of "comparable placement or value" to the
extent of such undelivered or delayed scheduled
Promotion.
1.1.4. "MISSION CRITICAL" PROMOTIONS. Notwithstanding the
foregoing, in the event that AOL fails to provide AG
with any integrated Promotion included as a "Mission
Critical Promotion" on Exhibit A-1 or an agreed
substitute (to the extent such failure is due to the
actions or inaction of AOL), in accordance with the
express timeline for such integrated Promotion
identified on such Exhibit A-1 (subject to Section
1.1.6 below) then a "Mission Critical Delayed
Integration Event" shall be deemed to have occurred
and shall continue until implementation of such
Integrated Promotion in question. In the event of a
Mission Critical Delayed Integration Event, AOL shall
have[ ] full months thereafter to remedy such
delay, and, if after such period AOL is unable to so
remedy, then the Parties shall negotiate for an
additional period of up to[ ] months to reach
mutual agreement upon either one of the following two
remedies: (A) extending this Agreement on a
non-exclusive basis (but only with respect to AOL's
obligations for all fixed placements for the
particular AOL brand on which the specific Integrated
Promotion was undelivered (i.e. a particular
Exclusive AOL Property, e.g., only on the AOL Service
or only the CompuServe Service, as and to the extent
applicable), and expressly not with respect to any
other carriage nor exclusivity) for a period equal to
[ ] times the length of the duration of such
Mission Critical Delayed Integration Event, at no
additional charge to AG (for example, a [ ] week
delay in achieving such a milestone would result in
[ ] such weeks of extension to the Initial Term
(with respect to the fixed placements on the
applicable brand); any such additional weeks are
referred to herein as "Extension Weeks"), but in
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any case only up to a maximum total extension period
for any and all such delays of [ ] in the
aggregate for any individual brand; or (B) delivering
to AG a mutually agreed upon alternative Promotion of
"comparable placement or value" to the extent of such
undelivered or delayed scheduled Promotion; provided
however, that if after so negotiating for such [
]
1.1.5. TECHNOLOGY SUPPORT. During the Initial Term, AOL will
provide AG with the technology support as set forth
in this Agreement (e.g., on Exhibit A-1 and Exhibit
I) and will complete the items described in Exhibit
A-1 and Exhibit I within the timelines as set forth
therein.
1.1.6. TRANSITION FROM V3 TECHNOLOGY TO V4. AG shall achieve
the Transition Completion Date on or before [
] (the "Scheduled Transition Completion
Date"), provided that the sole and exclusive remedy
available to AOL in the event of any failure or delay
in doing so (it being understood that "sole and
exclusive remedy" as used in this Section 1.1.6.
shall mean the sole and exclusive remedy for such
failure to achieve the Transaction Completion Date
itself, but not for any other breaches of this
Agreement that may be caused as a direct or indirect
consequence thereof, e.g., if and to the extent such
failure results in another breach hereof, e.g., if it
causes, in whole or in part, AG to fail to comply
with Section 1 of Exhibit E, then any such separate
breach shall still be deemed a breach, with its own
remedies and repercussions as set forth herein) shall
be as follows: (i) AG shall (a) cooperate with AOL to
the extent necessary to ensure that (x) database
encryption (with respect to the database of AOL
Users' credit card information) is implemented (i.e.,
installed in production) by [ ], (y) an
Online Viewing Area is available and implemented as
set forth herein by [ ] and (z) create
multiple databases on one or many servers to meet
increased demands (e.g., demand for greetings) as
necessary in order to comply with Exhibit E by
[ ] and (b) after the [ ] week
anniversary of the Scheduled Transition Completion
Date, pay AOL's actual and reasonable direct costs
(plus 25%) of support for V3 (including without
limitation to support encryption (as set forth in
Exhibit E and with respect to the database of AOL
Users' credit card information), an Online Viewing
Area and database scaling as required hereby) and the
costs of any mutually agreed enhancements to V3 for
the duration of any such failure or delay; provided
however that AG shall continue to provide its own
`front end' support for V3 (i.e., user interface and
other items that AG historically has performed or
supported) and AOL shall only be obligated, at AG's
expense, to provide such `back end' support for V3
and (ii) after the 3 week anniversary of the
Scheduled Transition Completion Date, for each
additional day late thereafter until the actual
Transition Completion Date is achieved, the date for
achieving any Hurdles & Thresholds, any date for
making payments by AOL to AG pursuant to the
Advertising Inventory Agreement Annex and each of
AOL's target timelines to integrate any Mission
Critical Promotion shall be delayed by an equivalent
time period (such that, for a one week delay in
achieving the Transition Completion Date, AOL shall
have one extra week to implement each Mission
Critical Promotion, to meet each of the Hurdles &
Thresholds, and to make each payment under the
Advertising Inventory Agreement Annex; provided
however, that the foregoing remedies shall only be
available to the extent that the failure or delay
occurs despite the best efforts of AOL (e.g., due to
AG's action or inaction). After the [ ] month
anniversary of the Scheduled Transition Completion
Date, whether or not AG has achieved the Transition
Completion Date, then, in addition to all other
rights and remedies of AOL herein, AOL shall have no
further obligation thereafter to support nor maintain
V3 or any related technologies thereafter, except
that, with respect to ART, AOL shall continue to
provide support to AG (i.e., ongoing maintenance, but
not enhancements / developments thereto) to the
extent set forth on Exhibit I attached hereto for the
then
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existing ART technology, and except that AG shall not
be excused from using best efforts thereafter to
achieve the Transition Completion Date as rapidly
thereafter as possible.
1.1.6.1. TECHNOLOGY LICENSE TO VERSION 2.0 AND V3.
Upon the Transition Completion Date (or the
Scheduled Transition Completion Date,
whichever is earlier), AOL and AG shall
jointly own (and each Party hereby licenses
its rights thereto to the other Party (as
set forth below, the "Technology License"))
all rights to Version 2.0 (as defined in the
Prior Agreement) and V3 as each exists on
the Interim Date and on the Transition
Completion Date, together with any
improvements or enhancements thereto
(including the technology itself but
expressly excluding Content therein to the
extent such Content is supplied by AG and
not by AOL (such Content being owned
exclusively by AG) and expressly excluding
V4 or any improvements or enhancements
thereto) (collectively, the "Licensed
Technology"), and neither Party can sell
such rights to such technology without the
consent of the other Party (not to be
unreasonably withheld). Such Technology
License shall be a perpetual, non-exclusive,
worldwide, license (with the right to
sublicense) to such Licensed Technology, in
object code and source code forms including,
without limitation, any source code
materials, designs, technical
specifications, and documentation related
thereto, including the rights to use, copy,
distribute, transmit, publicly perform and
publicly display, upgrade, enhance, create
derivative works from, and otherwise modify
such Licensed Technology.
1.1.7. CO MARKETING. In addition to the other promotions
described herein and without reducing in any way any
other such promotion, [
] of co-marketing in connection with the
launch of the Customized Site. Such co-marketing may
include, as reasonably determined by AOL in
consultation with AG, off-line promotions or on-line
promotions within the AOL Network (such as pop-up
screen promotions) and shall be coordinated with
marketing efforts of AG.
1.2. AG PROMOTION OF CUSTOMIZED SITE AND AOL. As set forth in
fuller detail in Exhibit C and subject to the terms and
conditions thereof, AG will promote the AOL Interactive
Service and will promote the availability of the Customized
Site through the AOL Network. The Customized Site shall not
promote any other Interactive Service whatsoever except for
(a) any offline retail entities with which American Greetings
Corporation or its Affiliates has a traditional retailing
relationship for the distribution of physical, offline
greeting cards (e.g., [ ]); provided that, if
AOL reasonably determines that such entity is a competitor of
AOL or its affiliates, then AOL shall be permitted to require
AG to stop promoting any such entities on the Customized Site
or (b) with AOL's prior written approval, any products or
services of an entity which is an Interactive Service, which
such products or services themselves, if provided by a
distinct entity, would not themselves make such entity an
Interactive Service (e.g., promoting phones from [ ]) (but
expressly not any products or services which would, themselves
qualify an entity as an Interactive Service (e.g., no ISP dial
up services of [ ])); provided that any entity which is
primarily an Interactive Service (i.e., at least the majority
of the products and services it provides or the majority of
its activities would, themselves qualify an entity as an
Interactive Service) shall not be excluded per this clause (b)
regardless of the product or service in question (e.g., if XYZ
company is primarily an Interactive Service, then even phones
from XYZ company would fall outside the scope of this
exception). On the Standard Site, AG shall not promote any
[ ] Interactive Service (except any products or services of
an entity which is a [ ] Interactive Service, which such
products or services themselves, if provided by a distinct
entity, would not themselves make such entity a [ ]
Interactive Service (e.g., promoting phones from [ ]) (but
expressly not any products or services which would, themselves
qualify an entity as a [ ] Interactive Service (e.g., no
ISP dial up services of [ ])); provided that any entity which
is primarily a [ ] Interactive Service (i.e., at least the
majority of the products and services it provides or the
majority of its activities would, themselves qualify an entity
as a [ ] Interactive Service) shall not be excluded per
this exception regardless of the product or service in
question (e.g., if XYZ company is primarily a
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[ ] Interactive Service (i.e., at least the majority of the
products and services it provides or the majority of its
activities would, themselves qualify an entity as a [ ]
Interactive Service), then even phones from XYZ company would
fall outside the scope of this exception) unless such
promotion is accompanied by an AOL promotion of equal or
greater prominence (except that AG may create a customized
version of AG's website for any third party, including another
Interactive Service, if and to the extent such site is
intended for or targeted to any third party's customers (and
is not the Customized Site nor AG's primary Standard Site) (a
"Third Party Customized Site"), and may so promote any
Interactive Service within such third party's own Third Party
Customized Site). AOL shall be promoted by AG with `equal or
greater prominence in the aggregate' (as described below) to
any other third party promoted in any AG offline promotions
(except for any offline retail entities with which American
Greetings Corporation has a traditional retailing relationship
(e.g., [ ])); it being understood and agreed that `equal
or greater prominence in the aggregate' shall mean as is
reasonably agreed by the Parties but may consist of promotions
in another offline promotion (i.e., does not generally require
side by side promotion in the same promotion), except that, in
the case of promotion of more than one Interactive Service in
any offline promotion involving AG, AOL must be promoted with
equal or greater prominence as every other Interactive Service
within the same promotion.
2. CUSTOMIZED SITE.
2.1. CREATION OF CUSTOMIZED SITE. AG will create customized,
co-branded versions of AG's primary Interactive Site (or more
than one customized version of AG's primary Interactive Site,
if necessary), which customized Interactive Sites shall comply
with all requirements set forth in Sections 2.2 and 2.3, and
all other requirements of this Agreement (collectively, such
site(s), as they or their successors may exist and be modified
hereafter consistent with the terms hereof, shall be referred
to herein as the "Customized Site"). AG shall be responsible
for all costs and expenses directly related to the
development, creation, communications, hosting and
connectivity associated with the Customized Site, unless and
to the extent otherwise expressly set forth herein and
excluding the costs and expenses of operating and maintaining
the AOL Network. Each page of the Customized Site shall have
AOL or AOL affiliate branded headers/toolbars (in mutually
agreed size and design, but substantially similar to AOL's
other major commerce partners (e.g., eBay)), shall have the
appropriate look and feel for the applicable AOL brand and
navigation back thereto, and, except as otherwise provided
below, shall be located on the URL for the appropriate AOL
affiliate (e.g., www.ag.aol.com or www.ag.compuserve.com,
provided that AOL makes use of such URL available to AG at no
charge) such that AOL receives credit for all traffic thereto,
in each case in accordance with AOL's (or the applicable AOL
affiliate's) then current generally applicable standards, and
contain a navigational link to the appropriate property of the
AOL Network. AOL shall cooperate with AG and any third party
traffic measurement service (e.g., Media Metrix), to
facilitate AG's also receiving credit for traffic to such URL
as part of its overall network. Without limiting the
foregoing, AOL shall issue a duly authorized letter to such
traffic measurement services requesting such credit for AG)
(the "Traffic Letter"). In addition to the foregoing, AOL will
ensure that AG gets credit (including at least as listed by
[ ] in
publicly announced traffic measurements regarding unique
visitors) for the full reach of unique visitors to the
Customized Site, including by, if and to the extent necessary
to achieve such result, [
].
2.2. CONTENT. AG will maintain a line of Greeting Products (and
other Content to the extent required herein) in the Customized
Site which is competitive with any Additional AG Channel and
with other leading full line providers of similar products
available on the Internet, in terms of breadth of content,
depth of content, quality of content, and functionality
incorporated within the content, to
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the extent the AOL Network's service capabilities and
functionality permit (the "Product Line Depth Requirements").
Except as mutually agreed in writing by the Parties (or as
required by this Agreement), the Customized Site will contain
only the AG Products listed on Exhibit D as they or their
successors may exist and be modified by AG hereafter
consistent with the terms hereof, and Content directly related
thereto (and any changes in the overall scope and nature of
the Products offered by AG in the Customized Site beyond those
listed on Exhibit D or otherwise set forth herein or mutually
agreed to by the Parties shall be subject to AOL's review and
reasonable approval, and the terms of this Agreement)
(collectively, the "Product Line Four Corners Requirements").
All sales of AG Products through the Customized Site will be
conducted either through a direct sales format (including
individual Product sales and quantity sales such as a "value
pack") or [
]. Subject only to express limitations of this
Agreement, AG shall have editorial discretion over the
editorial Content, programming and links (including in the
Cooperative Advertising Categories) (but in each case
excluding any Advertisements) on its Customized Site; [
] provided that, if AOL reasonably determines that
such Link [ ] has a material adverse
effect on AOL or its affiliates, then AOL shall be permitted
to require AG to terminate such Link [
] (but not to remove the editorial content related
thereto) (an "AOL Content Override"). AOL may exercise its
option to implement an AOL Content Override at any time;
provided that if and after AOL has exercised and implemented
an AOL Content Override more than [ ] times in any one
calendar year, then thereafter, in the event of any additional
AOL Content Override implemented by AOL, if such
implementation prevents AG from obtaining such editorial
content (e.g., such third party will not provide such content
without such Link) which such content, (i) by its unique or
special nature, AG is otherwise unable to obtain or supply;
(ii) which AG deems reasonably necessary to enhance the AG
Customized Site customer experience, and (iii) which AG
reasonably determines (in good faith), (subject to AOL's
consent, not to be unreasonably withheld), that such content
would add significant value or comprehensiveness to AG's
Greeting Product offerings, [
] AG will review, delete, edit, create, update and
otherwise manage all Content available on or through the
Customized Site in accordance with the terms of this
Agreement. To the extent AG has control over the sales of any
Advertisements within the Customized Site, AG will use
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commercially reasonable efforts to solicit advertising from
AOL's partners first, prior to accepting any Advertisements
for, or distributing the products, services or content of, any
third party which is a direct competitor in the same industry
with any of AOL's most significant exclusive or premiere
partners (e.g., in the telecommunications, credit cards,
books, music or auctions industry). Any such sales shall be
subject to AOL's then-applicable advertising policies and
AOL's prior approval (not to be unreasonably withheld). In any
case where an AOL partner (i.e. a party that has a customized
Interactive Site targeted to AOL Users and linked to from AOL
or one of the AOL brands that is an Exclusive Area hereunder
(a "Partner Customized Site")) seeks AG's permission to link
to an AG Interactive Site from the Partner Customized Site, AG
shall only permit such link to the Customized Site. The
Customized Site shall be subject to all AOL policies which are
generally applicable to AOL's commerce partners regarding the
distribution of streaming media (including, without
limitation, policies regarding downloads and streaming audio
or video) over the AOL Network. AG acknowledges that such
generally applicable policies may be different for each AOL
property or service. Without limiting any other terms hereof
(e.g., without limitation, Section 1 of Exhibit E), AG shall
use commercially reasonable efforts to have the applicable
Brand Specific Customized Site (e.g., with respect to
Netscape, the Brand Specific Customized Site tailored to the
Netscape audience), in each case at AOL's option (a) include
the ability for an AOL User to select a cover image from a
gallery of online electronic photos and pictures and to write
their own caption; (b) include the ability to send a
professional-looking online card using a photo the AOL User
provides themselves; (c) include the ability to send online
electronic cards (similar to traditional postcards) from major
destination cities; (d) include the ability to attach the AOL
User's own voice to an online electronic card by uploading an
audio file of themselves saying a greeting; (e) include the
ability in selected online cards to compose a lengthy note
with formatted text and hyperlinks for inclusion with an
online electronic card; and (f) include a catalog of online
electronic photos and pictures illustrating major historical
events for AOL Users to send in order to commemorate those
events, it being understood that (i) AG shall have no
obligation under any of (a) through (f) above to provide the
technology to carry out the digitization or other input by the
user of any sound or image, the foregoing requirements
applying only to technology to manipulate (as and to the
extent provided for above) such Content once online in digital
form, subject to reasonable technological limitations (e.g. as
to file size or format) and (ii) any obligation of AG is
subject to the capabilities and functionalities provided by
the AOL Network.
2.2.1. OTHER CONTENT FOR THE AOL NETWORK. Provided that (i)
AG retains ownership of the Licensed Content it
provides to AOL to be provided to end users; (ii)
end-users are subject to the same online licensing
and use restrictions with respect to such Content as
those in AG's then applicable online terms of service
or subscription agreement for such Content (or
substantially similar Content of AG) and (iii) AG is
provided appropriate Advertisement placement and
branding in any area in which its Content is
included:
2.2.1.1. CAPTIONS FOR YGP. AG will provide, at AOL's
option (to be exercised with reasonable
advance notice to AG), at no cost to AOL or
AOL Users from AG (but AOL may opt to charge
its end users, subject to mutual agreement
with AG as to the appropriate revenue share
to AG therefor), a non-exclusive library of
captions, for YGP users to choose from for
inclusion in their respective photo albums
(the "YGP Captions").
2.2.1.2. HOMETOWN. AG will provide to AOL, at AOL's
option (to be exercised with reasonable
advance notice to AG), at no cost to AOL or
AOL Users from AG (but AOL may opt to charge
its end users, subject to mutual agreement
with AG as to the appropriate revenue share
to AG therefor), (a) clip-art (and AG shall
allow integration of such art into AOL's
publishing tools); (b) home page templates
(and AG shall allow integration of such
templates into AOL's publishing tools); (c)
animated and/or interactive home page
artwork (similar to Thingworld.com or
Zapa.com); (d) member profile templates (and
AG shall allow integration of such templates
into AOL's Member Directory).
2.2.1.3. NETSCAPE WEBMAIL AND ICQ E-MAIL. AG shall,
at AOL's option (to be exercised with
reasonable advance notice to AG), at no cost
to AOL or AOL Users from AG (but AOL may opt
to charge its end users, subject to mutual
agreement with AG as to the appropriate
revenue share to AG therefor), provide
stationery for Netscape's Webmail and ICQ
E-mail products, (a) using HTML that
supports 3.x and above browsers; and (b)
which is organized into useful categories,
such as holidays, invitations, business,
etc.
2.3. CUSTOMIZATION OF CONTENT. Pursuant to Sections 2.1 and 2.2,
and the terms hereof and subject to AOL's approval (such
approval not to be unreasonably withheld), AG shall create
distinct versions of the Customized Site for each applicable
property of the AOL Network (i.e., one for each Exclusive AOL
Property, including each Foreign Local Market for AOL
International, e.g., one for linking from the AOL Service, one
for linking from the ICQ Service, etc., or any other AOL
property if and to the extent AOL is providing carriage from
such property pursuant to Exhibit A or
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Exhibit A-1 [
] (each, a "Brand Specific Customized Site");
provided that, as used in this Agreement (including without
limitation in Exhibit E, but except as otherwise provided
herein) each reference to or requirement or obligation for the
Customized Site shall apply equally to each individual Brand
Specific Customized Site. AG will include certain distinct
Content within each Brand Specific Customized Site, tailored
and targeted to the applicable audience (the "Brand Specific
Content")). The Parties will cooperate to mutually agree on
appropriate Brand Specific Content for each site, including at
a minimum (but in each case subject to the Rollout in Section
2.12 hereof), with respect to international distribution, each
Brand Specific Customized Site in each Foreign Local Market
and the Greeting Products and Content therein in the
appropriate local languages.
2.4. DELIVERY OF GREETING PRODUCTS AND CO-BRANDING. AG shall ensure
that all Greeting Products ordered from any Customized Site,
when delivered (regardless of the Greeting Media used for
delivery, as described below), shall include in the Greeting
Media (and, if and to the extent AG includes branding in its
Greeting Products for any third party [
],
then also in the Greeting Product) (i) prominent AOL
co-branding to appear as mutually agreed, (ii) links to an AOL
Interactive Site (provided that such site shall be one which
is mutually agreed to be contextually relevant by the Parties
or is otherwise a mutually agreeable site), and (iii) links to
the Customized Site only (but in no event to the Standard
Site). Immediately upon production implementation of V4, any
Greeting Products ordered from any Customized Site, when
delivered, shall be available for initial viewing by the
recipient online (e.g., in an online `pick-up window' rather
than being initially viewed as an e-mail or downloadable
attachment thereto), and any time any pick up window is used,
then such Greeting Products shall reside and be viewable
within (i.e., the pick up window itself shall only reside
therein) a designated area of an appropriate Brand Specific
Customized Site (the "Online Viewing Area") (it being
understood that the appropriate Brand Specific Customized Site
may depend on the identity of both the sender and the
recipient, as well as where and how such Product was ordered
(for example, an AOL Service member ordering a Greeting
Product through the AOL Service to be sent to a non-AOL member
cannot be accessible via the AOL Service Brand Specific
Customized Site by the recipient, since the recipient cannot
access such site)). However, the Parties may, by mutual
agreement as to the best consumer experience and user
interface, elect to subsequently change the initial delivery
vehicle (Greeting Media) for such Greeting Products (it being
understood and agreed that any such change may adversely
affect the total amount and/or value of the advertising
inventory on the Customized Site, and shall therefore also
require (a) mutual agreement regarding appropriate reductions
to (and revisions to the timing of) (1) [
] pursuant to the Advertising Inventory
Agreement Annex, and (2) AOL's Advertising Hurdle Amounts
pursuant to the Advertising Inventory Agreement Annex, and (b)
that AOL receives similar rights to the sale of advertising
inventory and revenue sharing with respect thereto on any such
new Greeting Medium as it has with respect to the Customized
Site). Each screen or page of each Online Viewing Area, if
any, shall contain a prominent link to an AOL Interactive Site
selected by AOL and co-branding as set forth herein and as
otherwise mutually agreed. In addition, any Greeting Media
(delivery vehicle for the link) containing the link to the
appropriate Online Viewing Area, if any, shall be co-branded
as mutually agreed (e.g., in an e-mail delivering a link to
view a Greeting Product, if ordered from the ICQ Service, then
the e-mail itself should contain a statement to the effect of:
"Sent to you by American Greetings, from ICQ" (or whichever is
the appropriate brand from which the Greeting Product was
ordered), or a substantially similar and/or mutually agreed
upon message. If the Greeting Product as ordered is an AOL
Exclusive Offer (as defined in Section 2.9), or otherwise
consists of content exclusively available to AOL Users or a
subset thereof, then such Greeting Media and Online Viewing
Area, if any, should contain a statement to the effect of:
"This Greeting available exclusively on AOL from American
Greetings" or a substantially similar and/or mutually agreed
message. [
8
<PAGE> 9
]
2.5. PRODUCTION WORK. Except as agreed to in writing by the Parties
pursuant to the "Production Work" section of the Standard
Online Commerce Terms & Conditions attached hereto as Exhibit
F or otherwise, AG will be responsible for all production work
associated with the Customized Site, including all related
costs and expenses, but excluding the costs and expenses of
operating and maintaining the AOL Network (and AOL shall be
responsible for any integration of any Integrated Promotions
within the AOL Network, including all related costs and
expenses, as required to implement such Promotions as
scheduled herein).
2.6. TECHNOLOGY. AG will conform its promotion and sale of Products
through the Customized Site to the then-existing technologies
identified by AOL which are optimized for the AOL Service
including, without limitation, any "quick checkout" tool which
AOL may implement to facilitate purchase of products by AOL
Users through the Customized Site; provided, however, without
limiting any other terms hereof (e.g., without limitation,
Section 1 of Exhibit E), in the case of any future technology
(and the cost of integration of such technology into the
Customized Site) that such technology is generally available
on commercially reasonable prices and terms [
]). AOL will be entitled to
require reasonable changes to the Content (including, without
limitation, the features or functionality) within any linked
pages of the Customized Site to the extent such Content will,
in AOL's good faith judgment, adversely affect, for
technological reasons such as Content format incompatibility
or excessive demand on bandwidth, any operational aspect of
the AOL Network. AOL reserves the right to review and test the
Customized Site from time to time to determine whether the
site is compatible with AOL's then-available client and host
software and the AOL Network, provided that such review and
testing is reasonable, is done using non-production system
copies of the Customized Site or planned and scheduled in
advance to prevent any performance degradation of the
production environment of the Customized Site.
2.7. PRODUCT OFFERING.
2.7.1. INITIAL PRODUCT OFFERINGS. The Product Line Depth
Requirements set forth in Section 2.2 shall not apply
to the extent it is commercially or technically
impractical to either Party (i.e., compliance would
cause either Party to incur substantial incremental
costs); and the Product Line Depth Requirements and
the Product Line Four Corners Requirements shall not
be deemed to have been violated to the extent that
any such Content is included briefly in one area on a
test basis.
2.7.2. AOL'S RIGHTS TO REQUEST ADDITIONAL PRODUCTS AND
SERVICES. AG (subject to its availability of
resources and the allocation, in AG's discretion, of
its development priorities) shall, upon reasonable
request (including reasonable advance notice) from
AOL, produce and deliver additional Content
("Broadband Content") tailored to broadband products
and services (e.g., animation clips, audio,
backgrounds (e.g., for AOL Member profiles, desktops
or screensavers)) provided, however, that if such
Content requires any additional technology, such
technology is generally available on commercially
reasonable prices and terms, or, in the case of
technology of AOL, that such technology is made
available by AOL [ ]. If and to the extent
AG creates or distributes any Products based on
Broadband Content, AG shall make the same available
to AOL
9
<PAGE> 10
hereunder (subject to Section 2.7.1 and the lead in
clauses (i) through (iii) of Section 2.2.1).
2.7.3. PARENTAL CONTROLS. AG shall cooperate with AOL to
develop appropriate and effective "parental controls"
for any AG Content that may not be suitable for
children, if any. AG acknowledges that this is in
addition to, and not in lieu of, AOL's Terms of
Service (available online on the AOL Service at
Keyword "TOS"), the terms of which shall still apply
to all AG Content as and to the extent provided
herein, including without limitation in Section 2 of
Exhibit F.
2.7.4. [
]
2.8. PRICING AND TERMS. [
]
provided, however, that AG shall not be restricted from
offering special or promotional pricing or from conducting
marketing tests of pricing with respect to any Additional AG
Channel (on a limited basis and to the extent such does not
have a material detrimental impact on AOL); provided further,
that AG shall not be restricted with respect to any marketing
or distribution channel that is not an Additional AG Channel;
and, provided further that AG shall not be deemed in violation
of the foregoing to the extent that its offerings are limited
by the capabilities and functionality of the AOL Network.
Without limiting the foregoing, AG and AOL will meet at least
[ ] to review whether the pricing and terms and
conditions of the Greeting Products within the Customized Site
are generally competitive compared with substantially similar
Greeting Products sold by or on behalf of any other major
greeting card provider offering a full line of Greeting
Products through any other online or Interactive Site
(including without limitation the mix of free products versus
upsells); and provided further that AOL agrees that AG will
not be deemed to have violated the provisions of this
Agreement by offering lower prices than those available
through the Customized Site in the following circumstances:
[
]
2.9. EXCLUSIVE OFFERS & CONTENT/MEMBER BENEFITS. AG will promote
through the Customized Site a program of special or
promotional offers [
] provided that
such promotions need not be identical or simultaneous to such
other offers. In addition, AG shall promote through the
Customized Site, [
] special offers which are exclusively
available to AOL Users (the "AOL Exclusive Offers"). The AOL
Exclusive Offers made available by AG shall provide a
substantial member benefit to AOL Users, either by virtue of a
meaningful price discount, product enhancement, unique service
benefit or other special feature. Specific AOL Exclusive
Offers to be made available by AG shall from time to time
include without limitation one or more of the AOL Exclusive
Offers listed on Exhibit D-1.
10
<PAGE> 11
AG will provide AOL with reasonable prior notice of AOL
Exclusive Offers so that AOL can market the availability of
such AOL Exclusive Offers in the manner AOL deems appropriate
in its editorial discretion. In addition to such Exclusive
Offers, AG will also create certain items of Greetings Content
exclusively for AOL Users (e.g., certain kids related content)
(the "Exclusive Content"). The Exclusive Content shall
include, at a minimum, that listed on Exhibit D-1.
2.10. OPERATING STANDARDS. In the event AG fails to comply with any
material term of this Agreement or any Exhibit attached
hereto, which failure, by its nature and in the specific case
has an immediate and material adverse effect on AOL [ ]
requires timely or immediate action by AOL [ ] any
of: [
]
then AOL will have the right (as the sole remedies available
to AOL hereunder, other than Sections 8.6, 8.7, and any
indemnification provisions hereof, (it being understood that
"sole remedies" as used in this Section 2.10 shall mean the
sole remedies for such immediate and material adverse effect
itself, but not for any other breaches of this Agreement that
may be caused as a direct or indirect consequence thereof nor
by the underlying failure to so comply by AG, e.g., if and to
the extent such failure results in another breach hereof,
e.g., if it causes, in whole or in part, AG to fail to comply
with Section 1 of Exhibit E, then any such separate breach
shall still be deemed a breach, with its own remedies and
repercussions as set forth herein)) to immediately, without
notice to AG (provided AOL uses reasonable efforts to so
notify AG and in any event so notifies AG immediately
thereafter), decrease the promotion it provides to AG
hereunder (but such decrease shall only be to the extent
reasonably necessary to address such specific problem, to the
extent feasible (e.g., by blocking certain Promotions in
certain channels rather than blocking all Promotions, if and
to the extent that is all that is necessary to prevent the
problem), until such time as AG corrects its non-compliance.
AOL shall promptly restore any such Promotions if and after AG
corrects such problems. In such event, AOL will be relieved of
that percentage of any promotional commitment made to AG by
AOL hereunder equal to the total number of days AG's violation
of clauses (i), (ii) or (iii) above divided by the total
number of days in the originally scheduled Initial Term
(without extensions or renewals) and any Hurdles & Thresholds
set forth herein will each be reduced by the same percentage
(but only to the extent applicable during the period of
non-compliance). The Parties acknowledge and agree that AOL
may take the immediate actions as set forth herein, but may
not immediately terminate this Agreement as a result of such
non-compliance by AG with the terms of this Section 2.10
unless after giving AG [ ] days notice and an
opportunity to cure during such [ ] day period, such breach is
continuing (provided that AG has not demonstrated a pattern of
such breaches, each under [ ] days, but in total having a
material adverse impact).
2.11. TRAFFIC FLOW. AG will take reasonable efforts to ensure that
AOL traffic is either kept within the Customized Site or
channeled back into the AOL Network (with the exception of
Advertising, sponsorship or other Links sold and implemented
as expressly permitted by this Agreement). The Parties will
work together on implementing mutually acceptable links from
the Customized Site back to the AOL Service or other
applicable area of the AOL Network. In the event that AOL
points to the Customized Site or any other AG Interactive Site
or otherwise delivers traffic to such site hereunder, AG will
ensure that navigation back to the AOL Network from such site,
whether through a particular pointer or link, the "back"
button on an Internet browser, the closing of an active
window, or any other return mechanism, is reasonably available
(as mutually agreed) to the user.
2.12. ROLLOUT. The Parties shall cooperate to implement a phased
roll out (the "Rollout") of the Customized Sites and ramp up
of certain of AG's obligations hereunder, in each case to the
extent set forth in this Section 2.12, and of certain of AOL's
Promotional obligations, in each case to the extent set forth
in this Section 2.12. The first phase of the Rollout shall
begin on the Interim Date and end on [ ] (or
earlier, if and to the extent mutually agreed) ("Phase One");
the second and final phase of the Rollout shall begin after
Phase One and end on [
11
<PAGE> 12
] (or earlier, if and to the extent mutually agreed), after
which, the Rollout shall be complete ("Phase Two", with Phase
One and Phase Two collectively being the "Ramp Up Period").
This Section 2.12 shall only apply during the Ramp Up Period,
and thereafter shall in no way limit any obligations elsewhere
herein. Notwithstanding anything to the contrary herein,
including without limitation the requirements of Section 1 of
Exhibit E, the following shall apply:
2.12.1. DURING PHASE ONE. (i) During Phase One (except as
provided below in clause (iii) with respect to the
AOL Service) AG shall be excused from any obligation
hereunder it is then not meeting relating directly to
the technical and operational ability of AG's
Customized Site to withstand traffic levels from
scheduled Promotions as set forth in Exhibit E); (ii)
During Phase One AOL shall cooperate with AG to
gradually ramp up Promotions hereunder (e.g., one
brand at a time) (and AOL shall therefore be excused
from any obligations to implement Promotions to the
extent reasonably necessary to comply herewith, and
AG shall be excused from any obligations (subject to
clauses (iii), (iv) and (v) below) to have the
Customized Site and all individual Brand Specific
Customized Sites launched on the Effective Date or
during Phase One to the extent reasonably necessary
to comply herewith (it being understood and agreed
that, so long as the requirement to have a Customized
Site or Modified Customized Site is excused, so are
necessarily all related obligations (e.g., without
limitation, that such site have customized content,
pick up windows, technology requirements, etc.))), to
allow load testing (it being understood and agreed
that, during the entire Ramp Up Period (including
during Phase One), AOL shall reserve its rights under
Section 2.10 to act immediately for timely issues,
but not any termination right as a result thereof
pursuant to Section 2.10, until after the end of
Phase One); (iii) During Phase One the Brand Specific
Customized Site for the AOL Service will be launched
and fully compliant with all terms of this Agreement
applicable thereto by the Scheduled Transition
Completion Date; (iv) During Phase One AG will launch
all of the other Brand Specific Customized Sites, but
such sites may be merely Modified Customized Sites
(subject to clause (v) with respect to international
sites) (it being understood and agreed that the
obligation to have a Customized Site and all the
related requirements thereof are excused provided
that the obligations to have Modified Customized
Sites and all related obligations thereof are met in
accordance herewith); and (v) During Phase One AG
will launch Content meeting the requirements of
Section 1 of Exhibit E for each Brand Specific
Customized Site, including each international Brand
Specific Customized Site in each Foreign Local
Market, except that during Phase One the
international Brand Specific Customized Sites need
not be fully localized (i.e., Greeting Products and
other Content therein shall be provided in the local
language, but the Brand Specific Customized Site
website itself may still be in English by the end of
Phase One).
2.12.2. DURING THE ENTIRE RAMP UP PERIOD. (i) During Phase
Two, AG shall convert each of the Modified Customized
Sites to the compliant various Brand Specific
Customized Sites; (ii) During the entire Ramp Up
Period AOL shall not be required to link Promotions
to any site that is not a Customized Site, but may
link to a Modified Customized Site if the Parties
mutually agree (in which case AOL shall share in the
revenues to any site linked to in accordance with the
terms hereof on the terms provided for a Modified
Customized Site; and (iii) During the entire Ramp Up
Period AG shall not be deemed in breach of this
Agreement for AG's failure, with respect to
individual international Brand Specific Customized
Sites in any Foreign Local Markets, to meet the
obligations of Section 1 of Exhibit E with respect
thereto (and therefore AOL shall not be entitled to
terminate the Agreement for a material breach of AG
for such event); provided that AOL shall still be
entitled, subject to Section (v) of Section 2.12.1
above, to terminate the exclusivity and/or the
carriage in any such Foreign Local Market for such
failure to meet such obligations (i.e., in such case,
AOL may terminate the exclusivity or the agreement
with respect to only those Foreign Local Markets
which are not compliant with Section 1 of Exhibit E,
but such may not be deemed a material breach of the
entire Agreement by AG). By the end of Phase Two, AG
will have launched each Brand Specific Customized
Site and each
12
<PAGE> 13
shall be fully compliant with all requirements
hereof, including being customized to the applicable
audience to the extent required by Section 2.3.
3. AOL EXCLUSIVITY OBLIGATIONS.
3.1. [
]
3.2. [
]
3.2.1. [
]
[
]
[
]
[
]
3.2.2. [
]
3.2.3. [
]
3.2.4. [
]
13
<PAGE> 14
3.2.5. [
]
3.2.6. [
]
3.2.7. [ ]
3.2.8. [
]
3.2.9. [
]
3.2.10. [
]
14
<PAGE> 15
3.3. [ ]
3.3.1. [
]
3.3.2. [
]
4. PAYMENTS.
4.1. MINIMUM GUARANTEED CASH CONSIDERATION TO AOL. AG will pay AOL
a guaranteed cash payment of One Hundred Million Dollars (US
$100,000,000.00), payable as follows:
4.1.1. [
]
4.1.2. [
]
4.1.3. [
]
4.1.4. [
]
4.1.5. [
]
4.2. ADDITIONAL FINANCIAL SECURITY. [
]
4.3. IN-KIND PROGRAMMING AND PROMOTION. AG shall provide AOL with
the in-kind promotional commitments specified on Exhibit C-1
attached hereto (the "In-Kind Promotions"). AG shall be
responsible for operation and supervision of such promotions,
and for compliance with all applicable laws, rules and
regulations related to any such promotions. All In-Kind
Promotions shall be delivered in accordance with the terms of
such Exhibit C-1, including without limitation, subject to the
makegood provisions and remedies therein.
4.4. SHARING OF TRANSACTION REVENUES. With respect to each quarter,
AG will pay AOL an amount equal to the Applicable Percentage
of all Transaction Revenues in such quarter. Such amount shall
be due and payable for each quarter within [ ] days after the
end of such quarter. The "Applicable Percentage" for any
Transaction Revenues shall be [ ]%, except that the
Applicable Percentage shall be [ ]% with respect to any
Transaction Revenue that is in excess of the
15
<PAGE> 16
Threshold Amount of Transaction Revenue applicable to the
Contract Period in which such quarter occurs. Notwithstanding
the foregoing, after the applicable Threshold Amounts has been
achieved, the Applicable Percentage with respect to
Transaction Revenues generated directly for the sale of (a)
physical (offline) paper greeting cards shall only be [ ]%
and (b) plain paper or any other physical products which are
listed on Exhibit D shall only be [ ]%. Failure to hit any
Threshold Amount is not a breach hereof, but merely affects
the Applicable Percentage; if the Transaction Revenues in any
period do not exceed the Threshold Amount, then the amount of
the shortfall shall be added to the following period's
Threshold Amount (such that, if in calendar year 2001, only $[
] million in Transaction Revenues are generated, then for
calendar year 2002, the Threshold Amount shall be $[ ]
million (rather than $[ ] million). The Contract Periods and
the Threshold Amounts for each Contract Period during the
Initial Term of this Agreement shall be as follows (in each
case, the actual and reasonable expenses incurred by AG during
such period directly for the actual hosting and hardware costs
directly related to the Customized Site (but not any Standard
Site) shall be added to the Threshold Amounts listed below):
[
]
4.5. ADVERTISING ON THE CUSTOMIZED SITE. All Advertising on the
Customized Site shall be governed by the Advertising Inventory
Agreement Annex.
4.6. LATE PAYMENTS; WIRED PAYMENTS. 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 in effect
at such time. All payments to AOL required hereunder will be
paid in immediately available, non-refundable U.S. funds wired
to the "America Online" account, Account Number [ ] at
The Chase Manhattan Bank, 1 Chase Manhattan Plaza, New York,
NY 10081 (ABA: 021000021).
4.7. AUDITING RIGHTS. Each party will maintain complete, clear and
accurate records of all expenses, revenues and fees in
connection with the performance of this Agreement (i.e., with
respect to AG auditing AOL, only to the extent required for
collection of Customized Site Advertising Payments hereunder
by AOL and for which AG is sharing in such revenues; and with
respect to AOL auditing AG, only to the extent required for
collection of Site Revenues. For the sole purpose of ensuring
compliance with this Agreement, each party (or its
representative) will have the right to conduct a reasonable
and necessary inspection of portions of the books and records
of the other which are relevant to such other's performance
pursuant to this Agreement. Any such audit may be conducted
after [ ] business days prior written notice to the
party being audited. The party requesting the audit shall bear
the expense of any audit conducted pursuant to this Section
4.7 unless such audit shows an error in such party's favor
amounting to a deficiency in excess of [ ] percent ([ ]%) of
the actual amounts paid and/or payable hereunder, in which
event the other party shall bear the reasonable expenses of
the audit. The parties shall pay the amount of any deficiency
discovered by an audit within [ ] days after receipt
of notice thereof.
4.8. TAXES. Each party will collect and pay and indemnify and hold
the other harmless from, any sales, use, excise, import or
export value added or similar tax or duty not based on the
other's net income and arising out of that party's activities
hereunder, including any penalties and interest, as well as
any costs associated with the collection or withholding
thereof, including attorneys' fees.
4.9. REPORTS.
4.9.1. SALES REPORTS. AG will, subject to applicable legal
and privacy restrictions, provide AOL with monthly
reports (but shall have [ ] days to cure
non-delivery), providing information necessary to AOL
to optimize the marketing plan and the Promotions,
and information
16
<PAGE> 17
reasonably required for measuring revenue activity to
calculate any revenue sharing, including, for each
Brand Specific Customized Site, summary sales
information and e-mail address, data used for
calculating Transaction Revenues and Site Revenues,
and other mutually agreed information (the "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 AOL
acknowledges that such reports may contain
Confidential Information as defined herein).
4.9.2. USAGE REPORTS. AOL shall provide AG (but shall have
[ ] days to cure non-delivery) with reasonable usage
information related to the Promotions (e.g., a
schedule of the Impressions delivered by AOL at such
time) which is similar in substance and form to the
reports provided by AOL to other interactive
marketing partners similar to AG; AOL shall use
commercially reasonable efforts to include in such
reports other data mutually agreed as relevant, as
reasonably requested by AG, to the extent feasible.
AG acknowledges that such information may be
Confidential Information as defined herein.
4.9.3. CUSTOMIZED SITE ADVERTISING SALES REPORTS. AOL shall
provide AG (but shall have [ ] days to cure
non-delivery) with reasonable information with
respect to sales of Advertisements by AOL in the
Customized Site pursuant to the Advertising Agreement
Annex (e.g., Impressions, dollar amounts, advertising
entity) which is similar in substance and form to any
similar reports provided by AOL to other interactive
marketing partners similar to AG; AOL shall use
commercially reasonable efforts to include in such
reports other data mutually agreed as relevant, as
reasonably requested by AG, to the extent feasible.
AOL shall deliver such reports at least quarterly,
but shall use commercially reasonable efforts to
deliver such reports monthly within [ ] business days
after the end of the applicable month. If and to the
extent AG is permitted to sell any Advertisements in
the Customized Site, AG shall so provide similar
reports to AOL. Each Party acknowledges that certain
information within such reports may be Confidential
Information as defined herein.
4.9.4. FRAUDULENT TRANSACTIONS. To the extent permitted by
applicable laws, AG will provide AOL with a prompt
report of any fraudulent order, including the date,
screenname or email address and amount associated
with such order, promptly following obtaining
knowledge that the order is, in fact, fraudulent.
5. INTEGRATION OF AOL COMPONENT PRODUCTS.
5.1. AG INTEGRATION. To the extent AG determines, in its discretion
(except as provided in Section 5.3 below), to offer any third
party Component Product on the Customized Site or any Standard
Site (on a case by case basis for each Standard Site) (except
for any Third Party Customized Site), AG shall offer
exclusively (except as otherwise provided below) an AOL
version of such Component Product, so long as AOL is willing,
at its option, to license such Component Product to AG for use
on the Customized Site or Standard Site in question at no cost
to AG (e.g., if AG decides to introduce instant messaging on
the Customized Site, AG shall introduce either the ICQ Service
or AOL's Instant Messenger brand product, if AOL is willing to
license such products without charge to AG). AG shall be
permitted reasonable time to implement any Component Product
required hereunder, which time may be dependent on, among
other things, the Ramp Up Period for the Customized Site. Any
AOL Component Products offered by AG on the Customized Site or
any Standard Site described in this Section 5.1 shall be
prominently co-branded with the appropriate AOL brand and AG's
brand, if and to the extent feasible, subject as to AOL's
branding to AOL's generally applicable branding requirements
for such product, and shall contain a link to an AOL
Interactive Site where the user can learn more about the AOL
Component Product and/or AOL. AOL may, with respect to
Component Products on any Standard Site, if and as mutually
determined by the Parties, permit AG to privately label such
Component Product.
17
<PAGE> 18
5.2. SPECIFIC INTEGRATION REQUIREMENTS. At AOL's option, AG shall
include on the Customized Site links to the appropriate areas
of the AOL Network (as mutually agreed) containing the
following Component Products, and shall include the following
Component Products on the Standard Site, in each case on an
exclusive basis (i.e., shall only include an AOL version of
such Component Products), except to the extent otherwise
expressly set forth below): (i) AOL Calendar, (ii) YGP
(exclusively on the Customized Site and with equal or greater
prominence to all similar products on any Standard Site),
(iii) e-mail (if and to the extent AOL can deliver a product
within six months of the Interim Date) and (iv) the ICQ
Service instant messaging product or AOL Instant Messenger
(exclusively on the Customized Site and, on the Standard Site,
exclusively for [ ] months from and after the Interim
Date and thereafter on all Standard Sites with equal or
greater prominence to all similar products on any such
Standard Site) (in each case including any successor versions
or products). AG shall be entitled to all Advertising revenues
arising as a direct result of the inclusion of AOL Calendar or
e-mail on AG's Standard Site. Any AOL Component Products
offered by AG or any Standard Site described in this Section
5.2 (i.e. AOL Calendar, YGP, e-mail or instant messaging)
shall be prominently co-branded with the appropriate AOL
brand, and AG's brand, if and to the extent AOL co-brands such
product with any third party, subject to AOL's generally
applicable branding requirements for such product, and shall
contain a link to an AOL Interactive Site where the user can
learn more about the AOL Component Product and/or AOL. AOL
may, with respect to Component Products on any Standard Site,
if and as mutually determined by the Parties, permit AG to
privately label such Component Product.
5.3. INTEGRATION EXCEPTIONS. Notwithstanding anything to the
contrary herein (other than Section clause (ii) of 5.2, which
is not subject to clauses (i) and (ii) of this Section 5.3,
but only for the first [ ] months of the Initial Term
hereof), AG shall not be required to offer any AOL Component
Products (i) on any Third Party Customized Site; (ii) that is
not, in AG's reasonable determination, clearly supported by
reasonable objective market criteria, and such determination
is agreed with by AOL (such consent not to be unreasonably
withheld) generally competitive in all the following areas:
(a) end-user pricing, (b) functionality, (c) quality, (d)
customer service and fulfillment available from AOL; and (e)
ease of use; (iii) would require AG to expend more than a
commercially reasonable amount in order to implement
technologically; (iv) is not made available pursuant to a
license granting AG and its customers all necessary legal
rights on commercially reasonable terms and conditions
[ ]; (v)
with respect to the Standard Site (but not the Customized
Site) in any case or circumstance where AG is already using a
Component Product pursuant to an existing agreement with a
third party or is already using a Component Product listed in
Section 5.2 developed by or on behalf of AG as of the Interim
Date; provided AG hereby represents and warrants to AOL that,
to the best of its Knowledge, there are currently (as of the
Interim Date) no such pre-existing Component Product
obligations relating to the specific Component Products
expressly described in Section 5.2 only except as follows:
[ ];
or (vi) as to which AOL fails to meet its obligations pursuant
to Section 5.4.
5.4. AOL RESPONSIBILITY TO CUSTOMIZE. With respect to the Standard
Site (but not the Customized Site) AOL agrees to customize any
and all Component Products to AG's reasonable specifications
subject to AOL's consent, not to be unreasonably withheld;
provided that AOL shall have a reasonable period of time to
implement such customization according to a mutually agreed
timeline, taking into consideration the nature and extent of
such customization (but in no event less than [ ]). Such
customization may include, by way of example, a greetings tab
on YGP and top line integration into calendar.
5.5. CONTINUED USE. To the extent AG is then currently using any
AOL Component Product pursuant to the terms hereof at the time
of expiration or termination of the Term (subject to Section
8.9), then AG may continue to use such AOL Component Product
to the extent consistent with the terms hereof for [ ]
after the end of the Term.
6. PARTNER MARKETING. AG shall use best efforts to negotiate in good faith
with AOL to enter into a separate acquisition marketing agreement (but
will not be in breach hereof if, despite such efforts to
18
<PAGE> 19
negotiate, no agreement can be reached), within a reasonable time after the
Interim Date, in form and substance substantially similar to that generally used
by AOL for similar activities.
7. ENTERPRISE / E-COMMERCE SOLUTIONS. AOL and AG will explore the
potential of AOL supplying back-end commerce solutions through the
Sun-Netscape Alliance. Any such supply shall be subject to mutual
agreement.
8. TERM; RENEWAL; TERMINATION.
8.1. TERM. Unless earlier terminated or extended as set forth
herein, the initial term of this Agreement (the "Initial
Term") will commence on the Effective Date and will continue
until December 31, 2004 and thereafter, if and to the extent
applicable, until the conclusion of any applicable Extension
Weeks as provided in Section 1.1.4. (the "Extension Period").
8.2. RENEWAL. Upon the conclusion of the Initial Term or any
applicable Extension Period, AOL will have the right to renew
the Agreement for successive one-year renewal terms (each a
"Renewal Term" and together with the Initial Term, the
"Term"). A Non-Exclusive Renewal Term (as defined in Section
8.3 below) shall automatically commence following the
expiration of the Initial Term (or prior Renewal Term, as the
case may be), unless AOL shall have given notice of
non-renewal at least[ ] days prior to
the end of the then current term, or notice of AOL's desire to
start an Exclusive Renewal Term (as defined in Section 8.3
below) rather than a Non-Exclusive Renewal Term, at any time
prior to the end of the then current term. AOL shall be able
to terminate any Exclusive Renewal Term at any time by giving
[ ] days notice to AG, or to change an Exclusive Renewal Term
to a Non-Exclusive Renewal Term at any time by giving [ ] days
notice to AG. If AOL meets the Final Advertising Hurdle Amount
for the Final Advertising Hurdle Dates (in each case as
defined in the Advertising Inventory Annex Agreement), subject
to all terms applicable thereto, e.g., any reductions or
extensions in timing of the obligations to achieve such Final
Advertising Hurdle Amount for the Final Advertising Hurdle
Dates to the extent expressly set forth herein, then AOL shall
retain the right to continue to act as the exclusive sales
agent for Advertisements within the Customized Site for the
first Renewal Term (but expressly not any subsequent Renewal
Terms unless otherwise mutually agreed) as set forth in the
Advertising Inventory Annex Agreement for the Initial Term.
8.3. TERMS AND CONDITIONS DURING RENEWAL TERM; TYPES OF RENEWALS.
AOL may designate any Renewal Term as exclusive (an "Exclusive
Renewal Term") or non-exclusive (including any Renewal Term
not expressly designated as an Exclusive Renewal Term, a
"Non-Exclusive Renewal Term"). Any payments required by a
Party during any Renewal Term (e.g., revenue sharing) shall be
due and payable to the other Party quarterly, within [ ] days
after the end of each applicable quarter.
8.3.1. EXCLUSIVE RENEWAL TERMS. During any Renewal Term
expressly designated as an Exclusive Renewal Term by
AOL, (i) AOL shall continue to fulfill its
obligations with respect to Section 3 hereof; (ii)
AOL shall continue to provide integrated carriage in
e-mail to AG in similar scope and nature to any such
carriage as it existed immediately prior to the end
of the immediately preceding term or as otherwise
mutually agreed; (iii) AG will not be required to pay
any guaranteed, fixed payment (i.e., as described in
Section 4.1) nor perform the In-Kind Promotions
referred to in Section 4.2 and Exhibit C-1; (iv) AOL
will be entitled to [ ] percent([ ]%) and AG [ ]
percent ([ ]%) of all Customized Site Advertising
Payments; and (v) all other terms and conditions
hereof shall continue in full force and effect except
as otherwise expressly stated herein.
8.3.2 NON-EXCLUSIVE RENEWAL TERMS. During any Renewal Term
designated as a Non-Exclusive Renewal Term by AOL (or
not expressly designated as an Exclusive Renewal
Term) (i) AG will not be required to pay any
guaranteed, fixed payment (i.e., as described in
Section 4.1) or perform the cross-promotional
obligations specified or referred to in Exhibit C or
the In-Kind promotions referred to in Section 4.3 and
Exhibit C-1; (ii) AG will determine, in its
discretion (subject to the last sentence of Section
8.2 above), whether or not AOL shall be appointed as
AG's exclusive Advertising sales agent on the
Customized Site and (iii) AG
19
<PAGE> 20
shall pay AOL [ ] percent ([ ] %) of Site Revenues
(or[ ]% or [ ]% as provided in clauses (a) and (b) of
Section 4.3), regardless of any Hurdles & Thresholds
set forth herein (except that if at the end of the
Initial Term, the final Threshold Amount has not been
met, then the percentage payable shall remain at [ ]%
for [ ] days, and then shall become [ ]% (or [ ]% or
[ ]% as provided above) immediately thereafter); (iv)
AOL will be entitled to [ ] percent ([ ]%) and AG
[ ] percent ([ ]%) of all Customized Site
Advertising Payments; (v) AG will maintain a Modified
Renewal Customized Site and comply with all the
requirements thereof; (vi) AOL shall not be required
to comply with the provisions of Section 3 (e.g.,
exclusivity); (vii) AOL shall have no placement or
promotion obligations; (viii) AG shall comply with
the Product Line Four Corners Requirement and (ix)
the terms and conditions of Sections 4.6 through 4.9,
9 and 10 hereof (including the terms and conditions
incorporated therein (i.e., Exhibits F and G)) shall
continue in full force and effect except as otherwise
expressly stated herein.
8.4. CONTINUED LINKS. Upon expiration of the Term, AOL may, at its
discretion (subject to the obligations to redirect for six
months as set forth below), continue to promote one or more
"pointers" or links from the AOL Network to an AG Interactive
Site and, continue to use AG's trade names, trade marks and
service marks in connection therewith (collectively, a
"Continued Link"). So long as AOL maintains a Continued Link,
(a) the provisions of a Non-Exclusive Renewal Term shall
apply, except only that clause (viii) of Section 8.3.2 shall
no longer apply, and (b) Sections 4.6 through 4.9 along with
the terms of Exhibits F and G hereto shall continue to apply
with respect to the Continued Link and any transactions
arising therefrom. For a period of at least [ ] months
after any termination of this Agreement (including any
renewals or extensions hereof), AOL shall be required to
redirect traffic from such co-branded URLs to an AG designated
URL and maintain a Continued Link, and AG shall be required to
maintain the Modified Renewal Customized Site at such
location; provided that AOL shall not be required to redirect
to any site that is not a Customized Site, Modified Customized
Site or Modified Renewal Customized Site meeting all the
requirements thereof (e.g., without limitation, if the
location to which AG requests redirection to promotes any
Interactive Service in violation of Section 1.2, then AOL
shall not be required to link thereto)). Thereafter, AOL may
choose to maintain such a Continued Link, but shall not be
required to.
8.5. CERTAIN STANDARD SITE LINKS. In the case of any link from the
AOL Network to a Customized Site or a Modified Renewal
Customized Site during a Renewal Term or a Continued Link, in
accordance with the applicable terms hereof, in the event that
AOL reasonably determines that the Customized Site or Modified
Renewal Customized Site is not being maintained in compliance
with the applicable requirements hereof AOL may, in addition
to any other applicable rights or remedies hereunder, link
instead (i.e. upon terminating any link to the Customized Site
or Modified Renewal Customized Site) to AG's primary Standard
Site. In such event the calculation of AOL's applicable
revenue shares shall be made as if such Standard Site were the
Customized Site, and using the definition of "AOL Standard
Site Purchaser" as the definition of "AOL Purchaser" in place
thereof, and, in the case of Customized Site Advertising
Payments to the extent of the following fraction of
advertising revenues of such Standard Site: (a) Impressions on
such Standard Site attributable to AOL Users, divided by (b)
total Impressions on such Standard Site.
8.6. 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 and continuing after
[ ] days written notice thereof to the other Party (or
such shorter or equal period, in each case without duplication
hereof, as may be specified elsewhere in this Agreement (e.g.,
if a[ ] day cure period is expressly provided elsewhere in
this Agreement, such cure period is not in addition to this[ ]
day period)); provided that AOL will not be required to
provide notice to AG in connection with AG's failure to make
any payment to AOL required hereunder, and the cure period
with respect to any scheduled payment will be [ ]
days from the date for such payment provided for herein.
Notwithstanding the foregoing, in the event of a material
breach of a provision that expressly requires action (other
than the giving of a notice with respect to a breach) to be
completed within an express period
20
<PAGE> 21
shorter than [ ] days, either Party may terminate this
Agreement if the breach remains uncured and continuing after
written notice thereof to the other Party.
8.7. 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 [ ]
calendar days or (iv) makes an assignment for the benefit of
creditors.
8.8. TERMINATION FOR NON-COMPETITIVE PRODUCT. In the event that AG
(due to AG's act or omission, and not due to the act or
omission of AOL or any AOL Affiliate) fails to comply with the
requirements of Section 1 of Exhibit E (overall; or with
respect to the U.S. market; or with respect to any Foreign
Local Market; or on any one Brand Specific Customized Site
(e.g., if the ICQ Service Brand Specific Customized Site [
]
fails to comply with the requirements of Section 1 of Exhibit
E), then AOL may deliver to AG a notice specifying the nature
of such failure (a "Non-Competitive Status Notice"), and AG
shall have [ ] days after the Non-Competitive Status Notice to
cure such non-compliance. If AG fails to so comply, then AOL
will have the right, at its option, immediately upon written
notice from AOL (a "Termination Notice") (i) to terminate its
obligations under this Agreement only with respect to the
specific brand or Foreign Local Market in which AG is then
continuing to fail to meet the requirements of Section 1 of
Exhibit E, or, if AG is then continuing to fail to meet the
requirements of Section 1 of Exhibit E overall, then with
respect to the entire Agreement (in which case subject to the
elimination of any applicable remaining payment obligations by
AG and subject to the survival obligations herein), (ii) to
terminate the application of Section 3 hereof (AOL Exclusivity
Obligations) terminating the exclusivity for the remainder of
the then current Term only with respect to the specific brand
or Foreign Local Market in which AG is then continuing to fail
to meet the requirements of Section 1 of Exhibit E.
8.9. TERMINATION ON CHANGE OF CONTROL. In the event of a Change of
Control of AG resulting in control of AG by an Interactive
Service, AOL may terminate this Agreement by providing [ ]
days prior written notice of such intent to terminate. In the
event of any such termination, AOL may, at its option, by [ ]
days advance written notice to AG, elect to require AG to
maintain, for a period of no more than two years (the
"Transition Period"), a Modified Renewal Customized Site,
subject to the following different requirements: the Modified
Renewal Customized Site shall be branded as AOL determines in
its reasonable discretion and shall not include any branding
of AG (other than "ingredient branding" of AG (e.g. "powered
by americangreetings.com" with appropriate logo reference),
and shall not contain any branding whatsoever of the
Interactive Service that acquired or otherwise controls AG
(the "New Parent"). Any links that AOL maintains to such a
Modified Renewal Customized Site shall be deemed "Continued
Links" subject to the requirements of Section 8.4 and 8.5
(including applicable revenue sharing for AOL, or the right to
point to the primary Standard Site if AG fails to comply
herewith as a non-exclusive remedy). In such event, (but only
if AOL was then acting as exclusive Advertising sales agent)
AOL shall act as exclusive sales agent for all advertising
inventory on such Modified Renewal Customized Site and shall
share in revenues therefrom [ ]% (with [ ]% going to
AOL), notwithstanding anything to the contrary herein. Upon
any such termination, any restrictions on use by AG of AOL
User or AOL Member data (but only to the extent otherwise
expressly set forth herein) applicable after the Term shall be
applicable for two years after the end of such Transition
Period (e.g., if otherwise applicable for [ ] after the
Term hereof, shall be applicable for such full [ ] period
after the Transition Period in this Section 8.9 expires), and
the New Parent shall be treated as a third party and not an
affiliate of AG for purposes of use of data or sharing of
Confidential Information hereunder.
8.10. PRO RATA REFUND. [
21
<PAGE> 22
8.11. [
]
]
8.12. PRESS RELEASES. Each Party will submit to the other Party, for
its prior written approval, which will not be unreasonably
withheld or delayed, any press release or any statement
intended for general public distribution (other than
advertising or similar statements which qualify as
"Promotional Materials" pursuant to Exhibit G, Section 1 and
which are governed thereby) ("Press Release") regarding the
transactions contemplated hereunder. Notwithstanding the
foregoing, either Party may issue Press Releases and other
disclosures as required by law without the consent of the
other Party and in such event, the disclosing Party will
provide at least [ ] business days prior written notice
of such disclosure. The failure by one Party to obtain the
prior written approval of the other Party prior to issuing a
Press Release (except as required by law) shall be deemed a
material breach of this Agreement.
9. MANAGEMENT COMMITTEE/ARBITRATION.
9.1. MANAGEMENT COMMITTEE. The Parties will act in good faith and
use commercially reasonable efforts to promptly resolve any
claim, dispute, controversy or disagreement (each a "Dispute")
between the Parties or any of their respective subsidiaries,
affiliates, successors and assigns under or related to this
Agreement or any document executed pursuant to this Agreement
or any of the transactions contemplated hereby. If the Parties
cannot resolve the Dispute within such time frame, the Dispute
will be submitted to the Management Committee for resolution.
For ten (10) business days following submission of the Dispute
to the Management Committee, the Management Committee will
have the exclusive right to resolve such Dispute; provided
further
22
<PAGE> 23
that the Management Committee will have the final and
exclusive right to resolve Disputes arising from any provision
of the Agreement which expressly or implicitly provides for
the Parties to reach mutual agreement as to certain terms. If
the Management Committee is unable to amicably resolve the
Dispute during the ten-day period, then the Management
Committee will consider in good faith the possibility of
retaining a third party mediator to facilitate resolution of
the Dispute. In the event the Management Committee elects not
to retain a mediator, the dispute will be subject to the
resolution mechanisms described below. "Management Committee"
will mean a committee made up of a senior executive at at
least the Senior Vice President (or equivalent) level from
each of the Parties for the purpose of resolving Disputes
under this Section 9 and generally overseeing the relationship
between the Parties contemplated by this Agreement. Neither
Party will seek, nor will be entitled to seek, binding outside
resolution of the Dispute unless and until the Parties have
been unable amicably to resolve the Dispute as set forth in
this Section 9 and then, only in compliance with the
procedures set forth in this Section 9.
9.2. ARBITRATION. Except for Disputes relating to issues of (i)
proprietary rights, including but not limited to intellectual
property and confidentiality, and (ii) any provision of the
Agreement which expressly or implicitly provides for the
Parties to reach mutual agreement as to certain terms (which
will be resolved by the Parties solely and exclusively through
amicable resolution as set forth in Section 9.1), any Dispute
not resolved by amicable resolution as set forth in Section
9.1 will be governed exclusively and finally by arbitration.
Such arbitration will be conducted by the American Arbitration
Association ("AAA") in Washington, D.C. and will be initiated
and conducted in accordance with the Commercial Arbitration
Rules ("Commercial Rules") of the AAA, including the AAA
Supplementary Procedures for Large Complex Commercial Disputes
("Complex Procedures"), as such rules will be in effect on the
date of delivery of a demand for arbitration ("Demand"),
except to the extent that such rules are inconsistent with the
provisions set forth herein. Notwithstanding the foregoing,
the Parties may agree in good faith that the Complex
Procedures will not apply in order to promote the efficient
arbitration of Disputes where the nature of the Dispute,
including without limitation the amount in controversy, does
not justify the application of such procedures.
9.3. SELECTION OF ARBITRATORS. The arbitration panel will consist
of three arbitrators. Each Party will name an arbitrator
within ten (10) business days after the delivery of the
Demand. The two arbitrators named by the Parties may have
prior relationships with the naming Party, which in a judicial
setting would be considered a conflict of interest. The third
arbitrator, selected by the first two, should be a neutral
participant, with no prior working relationship with either
Party. If the two arbitrators are unable to select a third
arbitrator within ten (10) business days, a third neutral
arbitrator will be appointed by the AAA from the panel of
commercial arbitrators of any of the AAA Large and Complex
Resolution Programs.
9.4. GOVERNING LAW. The Federal Arbitration Act, 9 U.S.C. Secs.
1-16, and not state law, will govern the arbitrability of all
Disputes. The arbitrators will allow such discovery as is
appropriate to the purposes of arbitration in accomplishing a
fair, speedy and cost-effective resolution of the Disputes.
The arbitrators will reference the Federal Rules of Civil
Procedure then in effect in setting the scope and timing of
discovery. The Federal Rules of Evidence will apply in toto.
The arbitrators may enter a default decision against any Party
who fails to participate in the arbitration proceedings.
9.5. ARBITRATION AWARDS. The arbitrators will have the authority to
award compensatory damages only. Any award by the arbitrators
will be accompanied by a written opinion setting forth the
findings of fact and conclusions of law relied upon in
reaching the decision. The award rendered by the arbitrators
will be final, binding and non-appealable, and judgment upon
such award may be entered by any court of competent
jurisdiction. The Parties agree that the existence, conduct
and content of any arbitration will be kept confidential and
no Party will disclose to any person any information about
such arbitration, except as may be required by law or by any
governmental authority or for financial reporting purposes in
each Party's financial statements.
23
<PAGE> 24
9.6. FEES. Each Party will pay the fees of its own attorneys,
expenses of witnesses and all other expenses and costs in
connection with the presentation of such Party's case
(collectively, "Attorneys' Fees"). The remaining costs of the
arbitration, including without limitation, fees of the
arbitrators, costs of records or transcripts and
administrative fees (collectively, "Arbitration Costs") will
be borne equally by the Parties. Notwithstanding the
foregoing, the arbitrators may modify the allocation of
Arbitration Costs and award Attorneys' Fees in those cases
where fairness dictates a different allocation of Arbitration
Costs between the Parties and an award of Attorneys' Fees to
the prevailing Party as determined by the arbitrators.
9.7. NON ARBITRATABLE DISPUTES. Any Dispute that is not subject to
final resolution by the Management Committee or to arbitration
under this Section 9 or by law (collectively, "Non-Arbitration
Claims") will be brought in a court of competent jurisdiction
in the Commonwealth of Virginia. Each Party irrevocably
consents to the exclusive jurisdiction of the courts of the
Commonwealth of Virginia and the federal courts situated in
the Commonwealth of Virginia, over any and all Non-Arbitration
Claims and any and all actions to enforce such claims or to
recover damages or other relief in connection with such
claims.
10. STANDARD AND MISCELLANEOUS TERMS.
10.1. STANDARD TERMS. The Standard Online Commerce Terms &
Conditions set forth on Exhibit F and Standard Legal Terms &
Conditions set forth on Exhibit G are each hereby made a part
of this Agreement.
10.2. SUBCONTRACTING. AOL agrees that AG may subcontract or delegate
the performance of any or all of its duties and obligations
hereunder to any Affiliate of AG, subject to AOL's approval,
which shall not be unreasonably withheld and which shall not
be required for subcontracting to AGCM, Inc. or to American
Greetings Corporation, provided that in the event of any such
subcontracting or delegation, AG shall remain liable
hereunder.
10.3. TREATMENT OF EXISTING AGREEMENT.
10.3.1. When fully executed and binding on all Parties
hereto, (a) this Agreement shall supercede and
replace (i) that certain Interactive Marketing
Agreement, dated as of September 1, 1997, by and
between AOL and American Greetings Corporation (the
"Prior Agreement"), and (ii) that certain Advertising
Insertion Order Agreement, dated as of May 4, 1999,
by and between AOL and American Greetings Corporation
(the "Prior Insertion Order"); and (b) the Prior
Agreement and the Prior Insertion Order shall
immediately terminate (provided that any accrued but
unpaid payment obligations thereunder (including
without limitation the unrecognized portions of any
subscription revenues, but calculated in accordance
with this Section 10.3) as of the date of termination
shall remain due and payable, and all payments made
by American Greetings Corporation thereunder shall
not be refunded by AOL, but the Credit Balance shall
be applied hereto to the extent provided in Section
4.1.1 hereof).
10.3.2. AG and AOL agree that they each, themselves and on
behalf of all their Affiliates, forever waive any
claim for breach of the Prior Agreement directly
resulting from any of the following activities to the
extent occurring prior to the Effective Date hereof:
i. [
]
ii. [
]
24
<PAGE> 25
[
iii.
iv.
v.
]
10.3.3. Notwithstanding Section 14.6 of the Prior Agreement,
Section 5.3(d) of the Prior Agreement is superseded
by Section 1.1.6.1 hereof.
10.3.4. Notwithstanding Section 14.6 of the Prior Agreement,
Sections 4.8, 9.1, 10.1 through 10.4 and 14.5 of the
Prior Agreement, respectively, are hereby amended
with respect to actions or events under the Prior
Agreement and superseded by the corresponding
applicable provision of this Agreement (e.g., Section
4.8, Section 8 of Exhibit G, Sections 11 through 13
of Exhibit G and Section 20 of Exhibit G of this
Agreement, respectively).
25
<PAGE> 26
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement
as of the Effective Date.
AMERICA ONLINE, INC. AMERICANGREETINGS.COM, INC.
By: /s/ David Colburn By: /s/ Josef Mandelbaum
------------------------------- ---------------------------
Name: David Colburn Name:
Title: Senior Vice President, Business Affairs Title:
AG.COM, INC.
By: /s/ Josef Mandelbaum
---------------------------
Name:
Title:
The undersigned is executing this Agreement solely for purposes of Section 10.3
hereof and expressly subject to the provisions of the first sentence of Section
4.2 hereof:
AMERICAN GREETINGS CORPORATION
By: /s/ John Klipfell
-------------------------------
Name
Title:
26
<PAGE> 27
EXHIBIT A
PLACEMENT/PROMOTION(1)
----------------------
[
]
A-1
<PAGE> 28
[
]
A-2
<PAGE> 29
[
]
A-3
<PAGE> 30
[
]
A-4
<PAGE> 31
[
]
A-5
<PAGE> 32
[
]
[
]
[
]
[
]
[
]
[
]
A-6
<PAGE> 33
[
]
A-7
<PAGE> 34
EXHIBIT A-1
"MISSION CRITICAL" PROMOTIONS
-----------------------------
[
]
A-8
<PAGE> 35
[
]
A-9
<PAGE> 36
[
]
A-10
<PAGE> 37
[
]
A-11
<PAGE> 38
EXHIBIT B
DEFINITIONS
-----------
The following definitions will apply to this Agreement:
ADDITIONAL AG CHANNEL. Any other online distribution channel (e.g., an
Interactive Service other than AOL) through which AG makes available an offering
comparable in nature to the Customized Site; but expressly excluding any
licensing to a software developer or marketer for inclusion in retail or OEM
software.
ADVERTISEMENTS. Any advertisements, links, pointers, sponsorships, buttons,
banners, navigation, or any other placements or promotions or similar services
or rights ("Links") to the extent generally recognized and used as a medium for
advertisements (including without limitation "affiliate programs" or referral
sales, i.e., promotions and links to promote sales of Products related to a
promoted or purchased AG Product, whether for a fixed placement fee or a bounty
based on sales), but excluding [
]
ADVERTISING INVENTORY AGREEMENT ANNEX. The Advertising Inventory Agreement Annex
attached hereto as Annex 2 (and incorporated herein and made a part hereof).
ADVERTISING SALES COMMISSION. The [ ]% commission payable to AOL for the sale
of any Advertisements pursuant to the terms hereof.
AFFILIATE or AFFILIATE. As to any entity, another entity that is controlled by,
controlling or under common control with such first entity, where control means
the ownership of [ ]% or more of the voting equity interest in such entity.
AG COMPETITORS. [
]
AIM SERVICE. AOL's "Instant Messenger(TM)" branded service, to the extent within
the Exclusive AOL Properties ("IM"), or the "AOL Instant Messenger(TM)" or "AIM"
branded service to the extent within the AOL Service or the CompuServe Service
("AIM"), in each case that enables end-users of such service to exchange, in
real-time, private, personalized messages with, and to monitor the online status
of, other end-users of such service and AOL Members.
AOL INTERACTIVE SITE. Any Interactive Site which is managed, maintained, owned
or controlled by AOL or its agents.
AOL INTERNATIONAL. The standard, narrow-band versions of AOL or AOL Affiliate
branded services primarily aimed at users outside of the United States, launched
and commercially available as of the Effective Date hereof, and offered under
the following brand names and targeted to the corresponding Foreign Local
Markets: AOL UK, AOL France, AOL Germany, AOL Canada, AOL Japan, AOL Australia,
CSI UK, CSI Germany, CSI France, CSI Netherlands, and CSI Canada, but in each
case, specifically excluding (a), [
]
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 AOL.com.
B-1
<PAGE> 39
AOL MEMBER. Any authorized user of the AOL Service, including any sub-accounts
using the AOL Service under an authorized master account.
AOL NETWORK. (i) The AOL Service, (ii) AOL.com, (iii) the CompuServe Service and
CompuServe.com, (iv) Digital City, (v) Netcenter, (vi) the ICQ Service, (vii)
ICQ.com, (viii) AOL International, (ix) [
] It is understood and agreed that, except as provided herein,
the rights of AG relate only to the specific areas within the AOL Network as
expressly set forth herein and not generally to the AOL Network.
[
]
AOL PURCHASER. Any person or entity [
] or [ ] who prior to the Effective Date hereof, entered the
"Online Social Expression Store" under the Prior Agreement and generated
revenues therein (to the extent the identity of such person or entity is
traceable though AG's commercially reasonably efforts) (regardless of whether
such person or entity provided an e-mail address which included a domain other
than an "AOL.com" domain).
[
]
AOL SERVICE. The primary, narrow-band U.S. version of the America Online(R)
brand service as it exists at any time during the Term hereof (i.e., the current
primary, narrow-band U.S. version of the America Online(R) brand service as of
the Effective Date and any replacement successor primary, narrow-band U.S.
version of the America Online(R) brand service), specifically excluding [
]
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[
]
AOL STANDARD SERVICE EXCEPTIONS. [
]
AOL STANDARD SITE PURCHASER. (i) Any person or entity who enters the Customized
Site, a Modified Customized Site, a Modified Renewal Customized Site or the
Standard Site, or any other AG Site (but not any Third Party Customized Site)
(an "AG Site") from the AOL Network including, without limitation, from any
third party area therein (to the extent entry from such third party area is
traceable through both Parties' commercially reasonable efforts), and generates
Transaction Revenues (regardless of whether such person or entity provides an
e-mail address during registration or entrance to an AG Site which includes a
domain other than an "AOL.com" domain); and (ii) any other person or entity who,
when purchasing a product, good or service through an AG Site, provides an
AOL.com domain name or a Compuserve.com domain name (or any other AOL
affiliate's domain name) as part of such person or entity's e-mail address and
provided that any person or entity who has previously satisfied the definition
of AOL Purchaser or AOL Standard Site Purchaser will be or remain an AOL
Standard Site Purchaser, and any subsequent purchases by such person or entity
(e.g., as a result of e-mail solicitations or any off-line means for receiving
orders requiring purchasers to reference a specific promotional identifier or
tracking code) will also give rise to Transaction Revenues hereunder (and will
not be conditioned on the person or entity's satisfaction of clauses (i) or (ii)
above).
AOL USER. Any person or entity who uses the AOL Service, AOL.com, CompuServe,
Digital City, Netcenter, or the AOL Network, only to the extent of the person's
use of these properties as an Interactive Site or Interactive Service. A person
or entity shall not be considered an "AOL User" as a result of or in connection
with their use of these properties other than as an end-user thereof. For
example, use of the AOL Service to carry advertising shall not result in the
advertiser being considered an AOL User.
AOL.com. AOL's primary, narrow-band Internet-based Interactive Site marketed
under the "AOL.COM(TM)" brand as it exists at any timE during the Term hereof
(i.e., the current primary, narrow-band U.S. version of the AOL.com brand
Interactive Site as of the Effective Date and any replacement successor primary,
narrow-band U.S. version thereof), specifically excluding [
]
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]
AOL WHITE PAGES. AOL's own branded (or co-branded) online, interactive directory
generally available to the public containing national listings of names,
addresses, telephone numbers and e-mail addresses for individuals, organized and
searchable by name, address, telephone number or e-mail address as it exists on
the Interim Date as supplied pursuant to the Current White Pages Agreements, to
the extent within the AOL Exclusive Properties (without inclusion of clause (c)
of the AOL Standard Service Exceptions definition); but expressly excluding: [
]
[
]
[ ]
CHANGE OF CONTROL. (a) The consummation of a reorganization, merger or
consolidation or sale or other disposition of substantially all of the assets of
a party or (b) the acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1933,
as amended) of beneficial ownership (within the meaning of Rule 13d-3
promulgated under such Act) of more than 50% of either (i) the then outstanding
shares of common stock of such party; or (ii) the combined voting power of the
then outstanding voting securities of such party entitled to vote generally in
the election of directors. Neither the IPO, nor any transaction directly related
thereto (and within approximately the same timeframe thereof), shall constitute
a Change of Control of AG for purposes of this Agreement.
COMPONENT PRODUCTS. Any of the following products or services: (i)
Communications or community tools, products or services (e.g., instant
messaging, chat, voice-activated chat, voice message, IP telephony, e-mail,
message boards) (but specifically excluding a reminder service), (ii) search
engines, navigation services, or directories/listings (e.g., web search, white
pages, yellow pages), (iii) personalization services (e.g.,
homesteading/personal web publishing, calendar functions, "You've Got Pictures"
or other similar photographic services), (iv) shopping guides, decision guides,
"robots", or other similar shopping or decision aids, or (v) commerce/content
aggregation.
CompuServe.com. CompuServe's primary, narrow-band Internet-based interactive
site located at "www.compuserve.com" and marketed under the "CompuServe.com(TM)"
brand as it exists at any time during the Term hereof (i.e., the current
primary, narrow-band U.S. version of the CompuServe.com brand Interactive Site
as of the Effective Date and any replacement successor primary, narrow-band U.S.
version thereof), specifically excluding [
]
CompuServe SERVICE. The primary, narrow-band U.S. version of the CompuServe
brand service as it exists at any time during the Term hereof (i.e., the current
primary, narrow-band U.S. version of the CompuServe brand service as of the
Effective Date and any replacement successor primary, narrow-band U.S. version
thereto), specifically excluding [
]
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[
]
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 AG 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. Text, images, video, audio (including, without limitation, music used
in synchronism or timed relation with visual displays) and other data, Products,
advertisements, promotions, URLs, links, pointers and software, including any
modifications, upgrades, updates, enhancements and related documentation.
COOPERATIVE ADVERTISING CATEGORIES. The following categories: [
]
COST OF PREMIUMS. The actual and reasonable cost to AG of promotional and
premium items approved by AOL (such approval not to be unreasonably withheld)
that are provided to an AOL Purchaser in conjunction with the purchase of
Products. Premiums may include, without limitation and solely by way of example,
umbrellas, t-shirts and tote bags.
CREDIT BALANCE. The credit balance AG has from funds actually paid by AG to AOL
under the Prior Agreement (as defined in Section 10.3), but not yet accrued
under the Prior Agreement as of the Effective Date hereof, in an amount of[
]
CREDIT CARD COMPANIES. Credit card companies and credit card processing
companies (e.g., Master Card and Visa) and others performing a substantially
similar online payment facilitation service (i.e., "e-money") (it being
understood and agreed that any use thereof must still comply with all the terms
hereof (including without limitation regarding AOL Component Products, such that
an AOL wallet or AOL QuickCheckout should be used rather than a competitively
branded one)).
CURRENT WHITE PAGES AGREEMENTS. The current pre-existing agreements (as of the
Interim Date) between AOL and any third party partner providers of the
functionality and databases for the AOL White Pages, excluding any renewals or
amendments thereto, the term of which such agreements are as separately
disclosed to AG confidentially in writing.
CUSTOMIZED SITE. The specific customized area(s) or web site(s) to be promoted
and distributed by AOL hereunder through which AG can market and complete
transactions regarding its Products, as more further described in Section 2.
CUSTOMIZED SITE ADVERTISING PAYMENTS. Aggregate amounts collected plus the fair
market value of any other compensation received (such as barter advertising)
(but with respect to Referral Sales only, expressly only including only one half
of any amounts actually received by AG (e.g., commissions) pursuant thereto (the
"AG Referral Sales Revenues")) by AG, AOL or either Party's agents, arising from
the license or sale of Advertisements that appear within any pages of the
Customized Site (but excluding the same on any screens or forms preceding,
framing or otherwise directly associated with the Customized Site, which are
owned exclusively by AOL), including all applicable Advertising Sales
Commissions; provided that, [
]
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]
Digital City or DCI. The primary, narrow-band U.S. version of Digital City's
local content offerings marketed under the Digital City(R) brand name as it
exists at any time during the Term hereof (i.e., the current primary,
narrow-band U.S. version of the Digital City brand service as of the Effective
Date and any replacement successor primary, narrow-band U.S. version thereto),
specifically excluding [
]
EXCLUSIVE AOL PROPERTIES. The AOL Service, AOL.com, Digital City, the CompuServe
Service, CompuServe.com, the ICQ Service, ICQ.com, Netcenter, and (for two (2)
years from and after the Interim Date) AOL International.
EXCLUSIVE AOL TOOLS. AOL's e-mail, calendar and instant messaging products,
LOVE@AOL, and "AOL Hometown", and the AOL White Pages (provided that solely with
respect to AOL White Pages, Exclusive AOL Tools shall include AOL White Pages
only for the current term of the Current AOL White Pages Agreements (except as
otherwise expressly set forth on Exhibit A)); but in each case, only to the
extent offered directly through and within each of the Exclusive AOL Properties,
except that, [
]
---------------
[
]
B-6
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[
]
EXCLUSIVE AREAS. The Exclusive AOL Properties and the Exclusive AOL Tools.
EXCLUSIVE MENTIONS. Mentions which contain only references to an AOL brand,
logo, name or trade name or to an AOL property, product, or service within the
AOL Network, as designated by AOL (without any reference to AG or any AG
product, service, brand, logo, name or trade name).
[ ]
FOREIGN LOCAL COMPETITOR. A Marketer of Greeting Products headquartered outside
the U.S. (it being understood and agreed that affiliates and licensees of U.S.
based Marketers of Greeting Products shall be considered headquartered in the
U.S., whose Greeting Products are specifically targeted (both by language and
cultural content) to the audience in a particular Foreign Local Market.
FOREIGN LOCAL MARKET. Any specific, local, geographic area.
GREETING PRODUCT. [
]
[ ]
HURDLES & THRESHOLDS. Collectively, the Threshold Amount (as described in
Section 4.4 hereof) and the Advertising Hurdle Amount (as described in the
Advertising Inventory Agreement Annex).
B-7
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[ ]
ICQ SERVICE. The primary, narrow-band English language version of the ICQ brand
communications and messaging service (e.g., to U.S. based ICQ Members) as it
exists at any time during the Term hereof (i.e., the current primary,
narrow-band U.S. version of the ICQ brand service as of the Effective Date and
any replacement successor primary, narrow-band U.S. version thereto),
specifically excluding [
]
ICQ.com. ICQ's primary, narrow-band Internet-based English language Interactive
Site marketed under the "ICQ.com" brand as it exists at any time during the Term
hereof (i.e., the current primary, narrow-band U.S. version of the ICQ brand
Interactive Site as of the Effective Date and any replacement successor primary,
narrow-band U.S. version thereto), specifically excluding [
]
IMPRESSION. User exposure to the applicable Promotion, as such exposure may be
reasonably and consistently determined and measured by AOL in accordance with
its standard methodologies and protocols.
INTERACTIVE SERVICE. [
]
INTERACTIVE SITE. Any interactive site or area, including, by way of example and
without limitation, (i) an AG 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 Active Desktop.
INTEGRATED PROMOTIONS. As defined within the definition of Promotions below.
INTERIM DATE. [ ]
IPO. Any public offering of securities (e.g., an initial public offering) by AG
Parent.
KEYWORD SEARCH TERMS. or KEYWORDS (a) The Keyword(TM) online search terms made
available on the AOL Service, combining AOL's Keyword(TM) online search modifier
with a term or phrase specifically related to AG (and determined in accordance
with the terms of this Agreement), and (b) the Go Word online search terms made
available on CompuServe, combining CompuServe's Go Word online search modifier
with a term or phrase specifically related to AG and determined in accordance
with the terms of this Agreement).
KNOWLEDGE. The actual knowledge of the applicable Party's senior management
personnel that has substantial managerial authority with respect to the
applicable subject matter, after having made reasonable inquiry of each employee
to whom and in a manner that a prudent business person would inquire under
similar circumstances.
LICENSED CONTENT. All Content offered through the Customized Site by AG pursuant
to this Agreement or otherwise provided by AG or its agents in connection
herewith (e.g., offline or online promotional Content, Promotions, AOL
"slideshows", or pursuant to Section 2.2.1, etc.), including in each case, any
modifications, upgrades, updates, enhancements expressly authorized by AG and
provided hereunder, and, to the extent delivered to AOL, related documentation.
B-8
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[
]
MARKET. Sell, market, distribute (including for free), promote or advertise a
product.
MARKETER. Any person or other entity that sells, markets, distributes (including
for free), promotes or advertises a product.
MENTIONS. With respect to the Traditional Media In-Kind Promotions (as defined
on Exhibit C-1), any on-air audio and/or graphic references (of at least 10
seconds in length) to AOL or any trademark, trade name or logo thereof,
consistent with AOL's promotional and trademark and logo policies.
MODIFIED CUSTOMIZED SITE. A form of a Customized Site, meeting all the
requirements thereof; but excusing (1) the full extent of the otherwise required
co-branding required for a Customized Site and (2) the full extent of the
otherwise required brand specific customization (e.g., look and feel, etc.); but
expressly not excusing any other requirements, and therefor, without limitation,
(a) is a mirrored, cul de sac site (b) contains some co-branding for AOL or the
appropriate property (though not necessarily full co-branded customization such
as header), (c) is located on the appropriate AOL property's URL (e.g.,
www.ag.aol.com), (d) contains only the Products and Content listed on exhibit D
and otherwise permitted herein, (e) does not promote any Interactive Service
(other than if and to the extent expressly allowed by Section 1.2 for a
Customized Site) and (f) is fully compliant with Exhibit E Section 1, and (g)
shall enable tracking of visitors to the full extent necessary to track revenue
sharing as set forth herein. For purposes of calculations of revenue sharing
hereunder (e.g., for purposes of the definitions of Site Revenues, Transaction
Revenues, AOL Purchaser, Customized Site Advertising Payments and any other
provisions applicable, directly or indirectly, to calculating AOL's revenue
shares hereunder), but subject to the limitations above, a "Modified Customized
Site" shall be considered a form of a Customized Site.
MODIFIED RENEWAL CUSTOMIZED SITE. Shall not be a Customized Site (except to the
extent otherwise expressly set forth herein), but expressly subject to the
following requirements herein for a Customized Site: (a) is a mirrored, cul de
sac site; (b) contains some co-branding for AOL or the appropriate property
(though not necessarily full co-branded customization such as header); (c) is
located on the appropriate AOL property's URL (e.g., www.ag.aol.com); (d)
complies with the provisions of Exhibit E (e.g., operational and scalability
requirements) (but subject to clause (f) below); (e) does not promote any
Interactive Service (other than if and to the extent expressly allowed by
Section 1.2 for a Customized Site); (f) need not comply with the requirements of
Exhibit E-1, but shall be at least as comprehensive, competitive and compelling
(e.g., with respect to pricing of Products, scope and selection of Products,
functionality, quality of Products, customer service and fulfillment, and ease
of use) as AG's primary Standard Site (provided that to the extent such Modified
Renewal Customized Site is not so comprehensive, competitive and compelling
solely as a direct result of such restrictions by AOL on AG hereunder, this
obligation to be so comprehensive, competitive and compelling shall be deemed
satisfied); (g) during any Exclusive Renewal Term and for one full year after
the start of any Non-Exclusive Renewal Term, shall comply with all Content and
Product scope restrictions herein applicable to a Customized Site (e.g., shall
contain only Products and Content to the extent permitted by Exhibit D or
otherwise herein); (h) Subject to all terms and conditions applicable to a
Customized Site in Exhibits F and G (e.g., management of such site in a
professional manner, AG shall provide to AOL license to use such Licensed
Content therein, AG shall represent and warrant that it has rights to such
Licensed Content, etc.); (i) shall be subject to Sections 2.10 and 2.11 as if it
were a Customized Site; (j) expressly excusing (1) the full extent of the
otherwise required co-branding required for a Customized Site and (2) the full
extent of the otherwise required brand specific customization (e.g., look and
feel, etc.); (k) shall enable tracking of visitors to the full extent necessary
to track revenue sharing as set forth herein. For purposes of calculations of
revenue sharing hereunder (e.g., for purposes of the definitions of Site
Revenues, Transaction Revenues, AOL Purchaser, Customized Site Advertising
Payments and any other provisions applicable, directly or indirectly, to
calculating AOL's revenue shares hereunder), but for no other purposes (except
to the extent otherwise expressly set forth herein), subject to the limitations
above, a "Modified Renewal Customized Site" shall be considered a form of a
Customized Site.
NET CUSTOMIZED SITE ADVERTISING PAYMENTS. Customized Site Advertising Payments,
less all applicable Advertising Sales Commissions.
NETCENTER. Netscape Communications Corporation's primary, narrow-band
Internet-based Interactive Site marketed under the "Netscape Netcenter(TM)"
brand as it exists at any time during the Term hereof (i.e., the current
primary, narrow-band U.S. version of the Netcenter brand Interactive Site as of
the Effective Date and any replacement successor primary, narrow-band U.S.
version thereto), specifically excluding [
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]
[
]
PRIOR AGREEMENT. As defined in Section 10.3 hereof.
PRODUCT. Any product, good or service which AG (or others acting on its behalf
or as distributors) offers, sells, provides, distributes or licenses to AOL
Users.
PROMO CONTENT. As defined in Section 1.1.2.
PROMOTIONS. The promotions described on Exhibit A or Exhibit A-1, residing
within the AOL Network and not the Customized Site, plus any comparable
promotions delivered by AOL in accordance herewith (e.g., as set forth in
Section 1.1), including without limitation any buttons, banners, links,
pointers, sponsorships, or other promotions, advertisements or similar services
or rights ("Standard Promotions"), plus any additional promotions of the
Customized Site provided by AOL (including, without limitation, more integrated
promotions such as Keyword Search Terms, pull down menus, list boxes and other
navigational tools integrated into the AOL Network (including Promotions which
would be Standard Promotions (e.g., buttons or links) but which are more
integration into the AOL Network than standard advertising inventory, e.g., with
respect to the ICQ Service) ("Integrated Promotions").
[
]
REMNANT INVENTORY. Non-integrated, banner Advertising inventory which is unsold
at the end of the business day prior to the day on which that inventory will
run. If AG has purchased Remnant Inventory, AG's creative will be slotted into
such unsold inventory by AOL from time to time in accordance with internal AOL
policies. AOL does not guarantee that Remnant Inventory Impressions will be
delivered on any particular day(s) or that such Impressions will be delivered
evenly over the Term. Further, AOL does not guarantee placement on any
particular screen or group of screens (except that Channel level Remnant
Inventory will be run only within the specified Channel).
RUN OF SERVICE INVENTORY or ROS. A collection of non-integrated, banner
Advertising inventory made up of all areas of the relevant AOL property or
service. If Advertiser has purchased Run of Service Inventory, AOL will place
Advertiser's creative in different locations throughout the relevant property or
service in accordance with AOL internal policies. Run of Service Impressions
will be delivered reasonably evenly over a given time period. Advertiser may not
control placement within a Run of Service Inventory purchase and AOL does not
guarantee placement on any particular screen or group of screens (except that
Run of Channel Inventory will be run only in the specified Channel).
SCHEDULED TRANSITION COMPLETION DATE. As defined in Section 1.1.6.
SEARCH or SEARCH TERMS. An AOL branded online search tool, as made available by
AOL for use by AOL Users using the NetFind brand search engine and within the
AOL Network (the results of which such search are non-exclusive, and result in
references to many entities; any references to a Promotion related thereto is to
a rotational banner within the standard Advertising inventory available on a
page pulled up as a result thereof, not a manipulation of the results
themselves).
SITE REVENUES. The combination of Transaction Revenues and Customized Site
Advertising Payments.
STANDARD PROMOTIONS. As defined within the definition of Promotions above.
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STANDARD SITE. Any Interactive Site(s) (other than the Customized Site) which is
managed, maintained, owned or controlled by AG or its agents.
THIRD PARTY CUSTOMIZED SITE. As defined in Section 1.2 hereof.
TRANSACTION REVENUES. [
]
TRANSITION COMPLETION DATE. The date on which the transition from V3 to V4 is
100% complete, such that, thereafter, V4 is used and V3 is no longer used
(except with respect to ART, as set forth in Section 1.1.6), the system meets
AG's and AOL's scalability specifications, and no longer requires support from
AOL [
]
[
]
V3. The software system for AG's existing site on the AOL Service under the
Prior Agreement generally known as V3, usable by certain AOL Users but not on
the internet generally; provided that additional features may be implemented
from time to time on V3 codebase but will not cause the system to be known as
anything other than V3.
V4. [
]
[
]
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EXHIBIT C
AG CROSS-PROMOTION
------------------
1. Within AG's primary non-customized Interactive Sites (specifically
excluding any Third Party Customized Site), AG shall include at least
one of the following (collectively, the "AOL Promos"): (i) a prominent
"Try AOL" feature (at least 90 x 30 pixels or 70 x 70 pixels in size)
through which users can obtain promotional information about AOL
products or services designated by AOL and, at AOL's option, download
or order the then-current version of client software for such AOL
products or services; (ii) a promotional banner or button (at least 90
x 30 pixels or 70 x 70 pixels in size) appearing in a mutually agreed
location on the first screen of the AG Interactive Site, to promote
such AOL products or services as AOL may designate (for example, the
ICQ Service or the AOL Instant Messenger(TM)service); or (iii) a link
back to a location on the AOL Network that AOL shall designate (such as
a certain screen within the AOL Service or Aol.com). AOL will provide
the creative content to be used in the AOL Promos (including
designation of links from such content to other content pages). AG
shall post (or update, as the case may be) the creative content
supplied by AOL within the spaces for the AOL Promos within five days
of its receipt of such content from AOL. Without limiting any other
reporting obligations of the Parties contained herein, AG shall provide
AOL with monthly written reports specifying the number of impressions
to the pages containing the AOL Promos during the prior month. In the
event that AOL elects to serve the AOL Promos to the AG Interactive
Site from an ad server controlled by AOL or its agent, AG shall take
all reasonable operational steps necessary to facilitate such ad
serving arrangement including, without limitation, inserting HTML code
designated by AOL on the pages of the AG Interactive Site on which the
AOL Promos will appear.
2. In AG's television, radio, print and "out of home" (e.g., buses and
billboards) advertisements and in any publications, programs, features
or other forms of media over which AG exercises at least partial
editorial control, AG will include specific references or mentions
(verbally where possible) of the availability of the Customized Site
through the AOL Network, which are at least as prominent as any
references that AG makes to any AG Interactive Site (by way of site
name, URL or otherwise). Without limiting the generality of the
foregoing, AG's listing of the "URL" for any AG Interactive Site will
be accompanied by a substantially equally prominent listing of the
"keyword" term on AOL for the Customized Site. [
]
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<PAGE> 50
EXHIBIT C-1
IN-KIND PROMOTION OF AOL
1. BACK OF AMERICAN GREETINGS PAPER CARDS
Description: The following shall appear on English language printed greeting
cards manufactured or distributed in the U.S. by or on behalf of American
Greetings Corporation during the Initial Term (the "Physical Greeting Cards"),
to appear substantially as shown on Annex 1 hereto (but placement location on
the back of the card to be at the discretion of American Greetings Corporation),
with a guaranteed minimum aggregate number of [ ] such
cards to be distributed per year (provided that, in the event of a shortfall in
the first year hereof, AG shall not be in breach provided AG makes up such
shortfall during the Initial Term):
www.americangreetings.com
(Logo) AOL Keyword: AG
or
www.americangreetings.com
America Online Keyword: AG
2. AMERICAN GREETINGS CORPORATION PRINT ADVERTISING
Description: The following shall be included in [ ] impressions per year
of American Greetings Corporation's 4 color print ad placements (to appear
substantially similar as shown on Annex 1 hereto):
www.americangreetings.com
(Logo) AOL Keyword: AG
or
www.americangreetings.com
America Online Keyword: AG
3. AG (americangreetings.com) PRINT AND RADIO ADVERTISING
Description: The following shall be included in AG's 4 color print and radio ad
placements (based on a $[ ] media plan per year related to this section 3
of this exhibit) (provided that such reference to AOL is, in the case of print
placements, to appear substantially similar as shown on Annex 1 hereto, and in
the case of radio placements, to account for [ ]% of the on air time, e.g., at
least [ ] seconds of a 60 second radio spot, or be at least as prominent as
mention of AG's URL):
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<PAGE> 51
Print -
www.americangreetings.com
(Logo) America Online Keyword: AG
Radio -
Announcer mention, such as "www.americangreetings.com
or on America Online at Keyword: AG"
4. EXCLUSIVE CONTENT
Description: Exclusive content shall be provided as described on Exhibit D-1 of
the Interactive Marketing Agreement.
IN EACH CASE ABOVE, THE FOLLOWING SHALL APPLY:
(a) All In-Kind Promotions must be exclusive to AOL, such that AOL is the only
[ ] Interactive Service to be promoted in any In-Kind Promotion.
(b) All In-Kind Promotions shall be produced by AG at AG's sole cost and
expense and without charge (including without limitation advertising,
placement or integration charges) to AOL.
(c) All In-Kind Promotions shall be consistent with AOL's promotional and
trademark and logo policies, subject to AOL's prior review, current copies
of which AG hereby acknowledges receipt of (except as expressly set forth
in paragraphs 1, 2 or 3 of this Exhibit C-1 or on Annex-1 attached hereto,
which are expressly hereby approved).
(d) (i)AOL hereby consents to American Greetings Corporation's continued sale
and distribution of any Physical Greeting Cards containing the foregoing
reference to AOL as set forth above, notwithstanding any lapse, expiration
or termination of this Agreement; provided that all other terms and
conditions of such In-Kind Promotions, except for such lapse of the term,
are complied with.
(ii)For so long as AG sells cards with the Keyword "AG" appearing on the
back (e.g., after the term, if cards have already been printed and are
still available in stores), then AOL shall be required to maintain such
Keyword "AG" (subject to AOL's Keyword policies to the extent set forth
herein) and AG shall be required to maintain the Modified Renewal
Customized Site for AOL to direct users of the Keyword thereto; provided
that AOL shall not be required to link the Keyword to any site that is not
a Modified Renewal Customized Site meeting all the requirements thereof
(e.g., without limitation, such site shall not promote any Interactive
Service); provided further that AOL shall not be required to maintain such
Keyword and/or link any longer than [ ] after the Initial Term; and
provided further that any maintenance of the Keyword by AOL shall be
considered a Continued Link pursuant to Section 8.4 of this Agreement,
subject to the terms thereof (e.g., revenue sharing)).
(e) All print and radio ads provided for herein shall either (i) comply with
AG's (or American Greetings Corporation's) media plan, as delivered to AOL
in writing, and appear in the
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<PAGE> 52
publications, or radio programs and time slots, as expressly set forth
therein, or (ii) appear in substantially similar placements having the same
market value as in such media plan; provided that AG shall deliver to AOL a
revised copy of any such media plan promptly upon any revisions thereto.
(f) AG shall provide to AOL on a quarterly basis detailed reports with respect
to all In-Kind Promotions in a mutually agreed manner and level of detail,
including at a minimum a statement reflecting the number of Physical Cards
delivered, in the form attached hereto as Annex 2 to this Exhibit C-1.
Notwithstanding anything to the contrary herein, should AG fail, in any given
year of the Initial Term, to deliver the scheduled portion of any particular
In-Kind Promotions for such year, then any such failure or shortfall shall not
itself constitute a breach hereof but shall be remedied as follows: AG shall
have [ ] days after the end of the applicable year to deliver replacement
in-kind promotion(s) which is mutually agreed by the Parties to have comparable
value to the undelivered In-Kind Promotions (the "Mutually Agreed Replacement
Promotion"). If AG fails to deliver such Mutually Agreed Replacement Promotion
within such [ ] day period then AOL may reduce certain Promotions provided by
AOL to AG hereunder (other than those identified as "Mission Critical") by an
amount demonstrably equivalent in value to the amount of such shortfall of
undelivered In-Kind Promotions. In the event of a disagreement as to the value
of any undelivered In-Kind Promotions, AOL's third party media buying agency
shall determine the value therefor based on the standard rate card for such a
promotion, if available, or, if a standard rate card is not available, then
based on a proportionate value of the standard rate card for a similar
promotion. If there is a material variation between AG' third party media
valuation agency's valuation and AOL's media buying agency's valuation, AOL's
media buying agency's valuation shall govern, subject only to AG' right to
demonstrate that AOL's media buying agency's valuation is inaccurate. If the
Parties still cannot agree, then both Parties' media buying agencies shall
mutually agree upon a third, independent, media buying agency to settle such
dispute. [
]
C-4
<PAGE> 53
ANNEX 1 TO EXHIBIT C-1
----------------------
MOCK-UP OF LOGO-ON-CARD IN KIND-PROMOTION
[SEE ATTACHED]
C-5
<PAGE> 54
[Recycle Logo] PRINTED ON RECYCLED PAPER
40% Pre Consumer - 10% Post Consumer
LOGO
AMERICAN GREETINGS
www.americangreetings.com
America Online Keyword: AG
According to him.......Love Talk....According to her(TM)
[Bar Code]
Traditional Cards
C-6
<PAGE> 55
ANNEX 2 TO EXHIBIT C
CERTIFICATION OF COMPLIANCE WITH COMMITMENTS
REGARDING PROMOTIONS
Pursuant to Section 4.3 and Exhibit C-1 of the Interactive Marketing Agreement
between ____________ ("AG") and America Online, Inc. ("AOL"), dated as of
_________________, 1999 (the "Agreement"), the following report is delivered to
AOL for the period beginning _____________ and ending __________ (the "Period"):
I. PROMOTIONAL COMMITMENTS
AG hereby certifies to AOL that AG (or American Greetings Corporation, as the
case may be) completed the following promotional commitments during the Period:
TYPE OF PROMOTION DATE(S) OF DURATION/CIRCULATION OF RELEVANT CONTRACT
PROMOTION PROMOTION SECTION
------ ---------------------- -------------------- --------------------------------- -----------------------
1.
------ ---------------------- -------------------- --------------------------------- -----------------------
2.
------ ---------------------- -------------------- --------------------------------- -----------------------
3.
IN WITNESS WHEREOF, this Certificate has been executed this ___ day of
___________, 199_.
----------------------------------
By: _______________________________
Print Name: ________________________
Title: ______________________________
Date: ______________________________
C-7
<PAGE> 56
EXHIBIT D
DESCRIPTION OF PRODUCTS AND OTHER CONTENT
-----------------------------------------
[
]
D-1
<PAGE> 57
[
]
D-2
<PAGE> 58
EXHIBIT D-1
AOL EXCLUSIVE OFFERS & EXCLUSIVE CONTENT
----------------------------------------
EXCLUSIVE OFFERS: "AOL Exclusive Offers" by AG may include:
- Sweepstakes offering gifts such as cash;
- Promotions, including holiday promotions, which may include a [
] shopping spree; "Refer a Friend" promotions
offering a free subscription of equal or lesser value for every friend
signed for subscription, "Golden Greeting" promotion awarding a prize
for every 10,000th card sent or certain designated greeting, and
promotional tie with licensed partners such as [
] etc.
- Partner marketing specials for clothing, music, books, etc. (subject to
all AOL exclusivities)
- Contests requiring creative input, (e.g., create a Greeting or comic)
or entry with the winner receiving a personalized song, Greeting or
comic strip with a winners picture in it; or
- Channel specific special limited time pricing on subscriptions.
EXCLUSIVE CONTENT:
FUN SITE FOR KIDS
Description: Will include hundreds of designs of greetings, games,
interactive storybooks, comics, and print creativity projects
in an online greetings and interactive entertainment area for
kids. All new content developed solely for the area will be
available from AG on the Customized Site on an exclusive basis
for [ ] months from its introduction.
AOL EXCLUSIVE ON LICENSED PROPERTIES
------------------------------------
Description: AG will provide AOL three-month exclusives on new content for
no less than [ ] licensed properties per year (i.e. such
content will be available from AG on the Customized Site on an
exclusive basis for [ ] months from its introduction).
CAPTIONS FOR YGP
----------------
Description: AG will provide a library of exclusive captions for use on the
YGP service. Content to be updated regularly. Such captions
will be available from AG on the Customized Site on an
exclusive basis for [ ] months from introduction.
D-3
<PAGE> 59
AOL HOMETOWN CONTENT
--------------------
Description: AG will provide AOL with clip art, home page templates and
animated and/or interactive artwork for AOL Hometown. Such
Content will be available from AG on the Customized Site on an
exclusive basis for [ ] months from its introduction.
CUSTOMIZATION OF CONTENT
------------------------
Description: AG will provide customized content to the various AOL
properties (i.e. exclusives for Digital Cities, Compuserve,
Netcenter etc.) as required by the Interactive Marketing
Agreement.
INTERNATIONAL CONTENT
Description: AG will provide customized international content to AOL
International and ICQ as required by the contract.
D-4
<PAGE> 60
EXHIBIT E
OPERATIONS
----------
[
]
E-1
<PAGE> 61
[
]
E-2
<PAGE> 62
[
]
E-3
<PAGE> 63
EXHIBIT F
STANDARD ONLINE COMMERCE TERMS & CONDITIONS
-------------------------------------------
[
]
F-1
<PAGE> 64
[
]
F-2
<PAGE> 65
[
]
F-3
<PAGE> 66
EXHIBIT G
STANDARD LEGAL TERMS & CONDITIONS
---------------------------------
[
]
G-1
<PAGE> 67
[
]
G-2
<PAGE> 68
[
]
G-3
<PAGE> 69
[
]
G-4
<PAGE> 70
[
]
G-5
<PAGE> 71
EXHIBIT H
[INTENTIONALLY OMITTED]
I-1
<PAGE> 72
EXHIBIT I
AOL TECHNOLOGY REQUIREMENTS
---------------------------
[
]
I-1
<PAGE> 73
[
]
I-2
<PAGE> 74
TECHNOLOGY INTEGRATION DEVELOPMENT WORK
---------------------------------------
[
]
I-3
<PAGE> 75
[
]
I-4
<PAGE> 76
[
]
I-5
<PAGE> 77
ANNEX 2
ADVERTISING INVENTORY AGREEMENT ANNEX
-------------------------------------
1. RIGHTS TO SELL ADVERTISING.
1.1. APPOINTMENT AS SALES AGENT. AOL will act as AG's exclusive
sales agent, both with respect to third parties and with
respect to AG and its affiliates, subject to the terms hereof,
for any and all Advertisements on the Customized Site
(including, subject to the express limitations herein, the
exclusive rights to act as sales agent for any Advertisements
therein and all rights to receive, on AG's behalf (to the
extent set forth herein and subject to the terms hereof), all
Customized Site Advertising Payments). AOL agrees to use
commercially reasonable efforts to, after the sale of any
Advertisements on the Customized Site (i.e., after execution
of definitive documentation by such third party and AOL),
expose such personnel to the buyers of such Advertisements
(e.g., arrange a meeting and make initial introductions), it
being understood and agreed that in particular cases it may be
commercially reasonable to exclude AG (e.g. where AOL is
selling Advertisements across a broad range of AOL properties
or without any targeting based on Greeting Products). As
exclusive sales agent, AOL may receive and hold, on AG's
behalf (to the extent set forth herein and subject to the
terms hereof), funds owing to AG in respect of the sales of
Advertisements on the Customized Site. For all Advertisements
within the Customized Site sold by AOL pursuant to the terms
hereof, AOL shall be entitled to keep the Advertising Sales
Commission from all Customized Site Advertising Payments,
prior to all calculations set forth herein.
1.2. INVENTORY. Total advertising inventory on the Customized Site,
[
] policies
and parameters for discounting off of such rate card, and any
other mutually agreed relevant factors will be as set forth by
the Parties pursuant to quarterly mutually agreed upon
marketing plans (each, a "Quarterly Marketing Plan"). Each
Quarterly Marketing Plan shall factor in AOL's need to meet
its revenue goals and obligations herein, industry standard
sell through rates and CPMs (including, to the extent
analogous, those on the Standard Sites), AG's revenue goals
for Transaction Revenues and the quality of the customer
experience for AG's customers and the prior quarter's
Quarterly Marketing Plan and successes and shortcoming
therein. Each Quarterly Marketing Plan (and the available
inventory therein) shall be subject to adjustment as provided
in Section 2.4 in the main body of this Agreement in the event
of any changes in the initial delivery Greeting Media (i.e.,
if an Online Viewing Area is not the initial method of
delivery of the Greeting Products). The Parties shall mutually
agree on the first Quarterly Marketing Plan within sixty (60)
days of the Interim Date, and thereafter, on successive
Quarterly Marketing Plans at or before the first five (5) days
of each calendar quarter; if the Parties have not mutually
agreed upon any applicable Quarterly Marketing Plan by such
time, then AOL may continue to sell Advertisements under the
prior quarter's Quarterly Marketing Plan. For each full month
of such delay (except if and to the extent AOL unreasonably
withheld consent in order to so delay), AOL's deadlines in
Section 1.3 below to reach each subsequent Advertising Hurdle
Amount, and in Section 2 below to make payments to AG by any
particular date, shall each be extended by the same amount of
time.
1.3. EXCEPTIONS. Notwithstanding anything to the contrary herein
regarding which Party shall sell the Adverting inventory
within the Customized Site (but still subject to Section 1.4
below and all Content and Advertising restrictions applicable
to the Customized Site, e.g., as set forth in Sections 1.2,
2.2 and, if applicable, 8.9 of the main body of this
Agreement),
1.3.1. [
]
Annex 2; Page-1
<PAGE> 78
[
]
1.3.2. [
]
1.3.3. AG shall not be restricted from including a Link to
an American Greetings Corporation Interactive Site;
and
1.3.4. [
]
[
]
1.4. [
]
2. [
]
2.1. [
]
Annex 2; Page--2
<PAGE> 79
2.2. [ ]
2.3. [ ]
3. SHARING OF ADVERTISING PAYMENTS.
3.1. AMOUNTS BEFORE AUGUST 2002. Out of any funds received by
either Party that constitute Customized Site Advertising
Payments (including any such amount allocated out of a larger
payment for a Total Ad Package Payment (as defined in Section
4 below)), if AOL acted as the sales agent in respect thereof
there shall first be deducted and paid to (or retained by) AOL
the Advertising Sales Commission. The remaining Net Customized
Site Advertising Payment shall be paid to (or retained by) AOL
in the percentages set forth on the chart below based on the
Contract Period and the amount of Net Customized Site
Advertising Payments received in that Contract Period, as
shown on the chart below, subject to the terms hereof:
[
]
Annex 2; Page--3
<PAGE> 80
[
]
3.2. POST AUGUST 2002. From and after August 1, 2002, the portion
of Net Customized Site Advertising Payments to be paid to or
retained by AOL shall be [ ]% until such time as Net
Customized Site Advertising Payments equal or exceed $[
] after which it shall be [ ]%, provided however that if as
of August 1, 2002 Net Customized Site Advertising Payments
exceeds $[ ], the portion thereof to be paid to or
retained by AOL shall be [ ]% until such time as the amount
paid to or retained by AG (including pursuant to Section 2
hereof) is $[ ] plus [ ]% of the excess Net
Customized Site Advertising Payments over $[ ] and
thereafter shall be [ ]%.
3.3. PAYMENTS. Payment of any net amount due to AOL or AG as a
result of the revenue share set forth in this Section 3 shall
be due and payable each quarter by the collecting Party to the
other Party within 30 days after the end of such quarter.
4. PACKAGES OF AOL NETWORK ADVERTISEMENTS WITH CUSTOMIZED SITE
ADVERTISEMENTS. In the event AOL sells Advertisements in a grouping
with placements in both the Customized Site and within the AOL Network
(an "Ad Package") (it being expressly understood and agreed that AOL
owns and retains all right, title and interest in and to all the
promotional and advertising spaces within the AOL Network), then the
portion of the aggregate amounts collected (plus the fair market value
of any other compensation received) from such Ad Package ("Total Ad
Annex 2; Page--4
<PAGE> 81
Package Payment") that is allocated to and deemed to be Customized Site
Advertising Payment will be determined as follows:
4.1. [
]
4.2. The Parties will cooperate to make available targeted ad
serving for use on the Customized Site as soon as commercially
practical following the Interim Date. In order for such
targeted ad serving to be implemented, AG will use
commercially reasonable efforts to ensure that the data
necessary to facilitate such targeting will be made available
to AOL in a manner which allows proper incorporation into
AOL's ad server. In addition, each Party will cooperate with
the other Party in order to aid in tracking Impressions
through the Customized Site for purposes of fulfilling their
respective reporting and revenue payment requirements. AG will
permit AOL or its affiliates or agents to serve the
Advertisements appearing in the Customized Site. AG shall
cooperate with AOL to assist in AOL's due diligence of the
ability of the Customized Site to comply herewith, and in the
event of any delay in AOL's ability to sell the Advertisements
as a result of any problem to the extent in AG's control and
not AOL's, AOL's deadlines in Section 1.3 above to reach each
subsequent Advertising Hurdle Amount, and in Section 2 above
to make payments to AG by any particular date, shall each be
extended by the same amount of time.
5. [
]
6. [
]
Annex 2; Page--5
CONFIDENTIAL