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Sample Business Contracts

Microsoft Corp. / WebTV Shopping Insertion Order - Microsoft Corp. and RedEnvelope Inc.

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                          MICROSOFT CORPORATION/WEBTV
                            SHOPPING INSERTION ORDER

ACCOUNT EXECUTIVE: KEVIN WILK
EMAIL: kwilk@microsoft.com

<TABLE>
<S>               <C>                       <C>          <C>
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  ADVERTISER:     Red Envelope
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     CONTACT:     Chas Akers
                  201 Spear St
                  San Francisco, CA 94105
                  (415) 371-9100 x260
                  cakers@redenvelope.com
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SITE URL:         www.redenvelope.com       TERM:        July 1, 2000 - June 30, 2001
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                                            TOTAL FEES:   $[*]
                                                         ($[*])
                                                         ($[*])
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</TABLE>

ORDER SUMMARY (SEE ATTACHED SPREADSHEET):

SUBJECT TO APPLICABLE TERMS AND CONDITIONS INCLUDED WITH THIS ORDER.

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                                                           MONTHLY
AD ELEMENTS                         ORDER TOTAL        GUARANTEED FEE                TOTAL AD REQUEST
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<S>                                 <C>                <C>                       <C>
[*]                                 [*]                                          See attached spreadsheet













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ADDITIONAL PLACEMENTS               [*]                                          See attached spreadsheet
[*]









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</TABLE>

* Material has been omitted pursuant
  to a request for confidential treatment.
<PAGE>

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<S>                                 <C>                                          <C>
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[*]                                 $[*]                                         See attached spreadsheet

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</TABLE>

ADDITIONAL TERMS:

EMAIL USERS.

         1.       MS agrees that Advertiser may apply [*] dollars ($US[*]) from
                  the MSN Shopping Order confirmation Premier Merchant Agreement
                  dated October 18, 1999 between the parties toward [*] ([*])
                  e-mail ad requests in the following newsletters targeted at
                  MSN users: (i) [*]; and (ii) [*]. Notwithstanding the
                  foregoing, MS shall be relieved of its obligation to provide
                  Emails once such Emails have met a metric of [*]: $[*] for the
                  Term, where [*] (US$[*]) equals sales revenue to Advertiser
                  and [*] (US$[*]) equals every [*] spent by Advertiser for the
                  placements set forth herein.

         2.       The parties will meet during the Term to monitor and manage
                  the progress of such e-mails and requests.

Click-Through users.

                  1.

                  (a)      In the event that Advertiser implements its Passport
         Wallet Technology (as defined in attached Passport contract) on or
         before October 23, 2000, MS will provide a minimum of [*] ([*])
         click-through users ("Click-Throughs") to Advertiser during the Term.
         Notwithstanding the foregoing, MS shall be relieved of its obligation
         to provide Click-Throughs once such Click-Throughs have met a metric of
         $[*]: $[*] for the Term, where [*] (US$[*]) equals sales revenue to
         Advertiser and $[*] equals every [*] spent by Advertiser for the
         placements set forth herein.

                  (b)      In the event that Advertiser does not implement its
         Passport Wallet Technology on or before October 23, 2000, MS will
         provide a minimum of [*] Click-Throughs to Advertiser during the Term.
         Notwithstanding the foregoing, MS shall be relieved of its obligation
         to provide Click-Throughs once such Click-Throughs have met a metric of
         $[ * ]: $[*] for the Term, where [*] (US$[*]) equals sales revenue to
         Advertiser and $[*] equals every [*] spent by Advertiser for the
         placements set forth herein.

                  2. The parties will meet during the Term to monitor and manage
                  the progress of the Click-Throughs.

                  3. MS Shall be obligated solely to provide the quarterly
                  Click-Through totals (each, a "Quarterly CT Benchmark") in
                  each on-line property set forth in Exhibit A, attached hereto.
                  In the event that MS determines that the Click-Throughs
                  derived from the [*] will be insufficient to meet a Quarterly
                  CT Benchmark, MS may supplement the banners and ads on the [*]
                  with banners and ads on [*] and [*]; provided, however that
                  the Click-Throughs from [*] and [*] required to offset a Click
                  Through on the [*] shall be adjusted to account for the lower
                  sales conversion ratio attributable to Click-Throughs from [*]
                  and [*] as compared to Click-Throughs from [*]. The parties
                  currently estimate that it will take [*] Click-Throughs from a
                  banner or other ad placed on [*] or [*] to make good on one
                  missed Click-Through from [*]. [*] Click-Throughs shall be
                  determined by clicks from all [*]. [*] clicks shall be derived
                  from [*] and [*] shall originate from small banners and text
                  ads. If MS fails to deliver at least [*] percent [*] of the
                  Quarterly CT Benchmark as set forth in Exhibit A, Advertiser
                  will provide MS with additional Offers or ad creative elements
                  within thirty (30) days of notification by MS. Thereafter, MS
                  will provide additional Advertiser approved Microsoft

                                       -2-










* Material has been omitted pursuant
to a request for confidential treatment.
<PAGE>
                  Passport co-branded ad requests for the Offers in the form of
                  [*] and [*] for the Offers ("Offer Ad Elements") at no charge
                  to Advertiser until such Quarterly CT Benchmark is achieved.
                  During any make-good period, the Offer Ad Element
                  Click-Throughs shall solely count against the quarter during
                  which the Quarterly CT Benchmark was not met, and such
                  make-goods shall be Advertiser's sole remedy for MS' failure
                  to deliver the Quarterly CT Benchmark. MS's obligation to make
                  good on its Click-Through obligations shall survive the Term
                  of this Agreement. Solely during such make-good period,
                  Advertiser will be relieved of payment for the invoice for
                  such quarter until the Quarterly CT Benchmark is met.

         4.       Advertiser will provide MS with promotional offers for MSN
         users ("Offers") during the Term. The Offers may include, but not be
         limited to, free or reduced shipping, discounts, free gift wrapping,
         exclusive product bundles or other compelling offers to increase MSN
         user response and Advertiser's sales.

         5.       MS will provide ad requests and Click-Throughs proportionally
         in accordance with the "Holiday Months", and the months of November,
         December, February, May and June are designated as such months. If MS
         fails to deliver higher Click-Throughs during the Holiday Months or
         does not provide the total Click-Throughs by the end of the Term,
         Advertiser's sole remedy for such failure will be (i) the extension of
         the Term during which MS will provide additional ad requests at no
         charge to Advertiser until the Click-Throughs are provided and (ii) the
         waiver of Advertiser's payment obligations as described in paragraph 3
         above until the Click-Throughs are provided.

MICROSOFT CORPORATION                       RED ENVELOPE
One Microsoft Way                           Chas Akers
Redmond, WA 98052-6399                      201 Spear St
                                            San Francisco, CA 94105
                                            (415) 371-9100 x260
                                            cakers@redenvelope.com

By (Sign) /s/ Jeff Bernstein                By (Sign) /s/ Charles W. Akers
              --------------                          --------------------
Name (Print) Jeff Bernstein                 Name (Print) Charles W. Akers

Title: Group Manager                        Title: Director [ILLEGIBLE]

Date: 9-15-00                               Date: 9-6-00

                                            By : /s/ Hilary Billings
                                                 ---------------------
                                            Name: Hilary Billings

                                            Title: Chairman

                                            Date: 9-6-00

                                      -3-









* Material has been omitted pursuant
  to a request for confidential treatment.
<PAGE>
            MICROSOFT CORPORATION NON-STANDARD TERMS AND CONDITIONS
                              MSN SHOPPING CHANNEL
                         WebTV SERVICE SHOPPING CENTER

1.       MATERIAL SPECIFICATIONS: Specifications for the material elements that
         Advertiser must include in any link, advertisement or other submission
         to Microsoft Corporation ("MS") for MSN Shopping and WebTV Service
         Shopping Center ("WebTV") will be distributed to Advertiser. All
         submissions to MS for MSN Shopping or WebTV hereunder will comply with
         all such applicable elements.

2.       ORDERS FOR ADVERTISEMENTS: All orders or other requests for advertising
         from an advertiser (whether made by the advertiser directly, or through
         an agency) ("Advertiser") are governed by these Standard Terms and
         Conditions and the attached Insertion Order (the "IO"). No other
         conditions, provisions, or terms of any sort appearing in any writings
         or other communications made in connection with such orders, including
         without limitation those contained on or accompanying checks or other
         forms of payment, shall be binding on MS, whether in conflict with or
         in addition to these Standard Terms and Conditions. MS reserves the
         right to refuse advertising buys from third parties that require ads to
         be served from that third party's servers. Except as otherwise
         specified by MS herein, all order provisions regarding positioning of
         advertisements shall be treated as requests, which requests shall be
         fulfilled at MS' sole discretion.

3.       ACCEPTANCE: MS' offer to publish advertisements for Advertiser is made
         on these Standard Terms and Conditions and the attached IO, and the
         placement or other communication of an order for advertising with MS
         shall constitute Advertiser's unconditional acceptance of these
         Standard Terms and Conditions; no acceptance shall be effective until
         it is received by MS in Redmond, Washington. MS reserves the right not
         to publish any advertisement if MS, in its reasonable judgement, finds
         the ad would violate third party rights, is libelous, defamatory,
         obscene or pornographic or would violate applicable law. In this case,
         MS is required to inform Advertiser of the problem and allow Advertiser
         the opportunity to submit a revised advertisement. Failure by MS to
         publish any requested advertisement pursuant to this Section 3 does not
         constitute a breach of contract or otherwise entitle Advertiser to any
         legal remedy. Upon acceptance, Advertiser agrees to comply with all
         specifications for material elements required for the MSN Shopping
         Channel or WebTV as designated by MS. The content of each and every
         advertisement is subject to the reasonable approval of MS, in the sole
         discretion of MS, and will be subject to such limitations as MS may
         reasonably deem appropriate. MS and its network service providers may
         elect to cache certain Advertiser pages on MS' servers or other
         technologies, and Advertiser hereby consents to such caching for the
         Agreement Term and subject to the provisions of this Agreement.

4.       FEES:

         A.       During the Term of this Agreement, Advertiser shall pay MS the
         following as itemized on the attached IO: (i) a monthly guaranteed fee
         for placement in MSN Shopping or WebTV, in equal monthly installments;
         and (ii) for media on WebTV and/or for MSN.com or any of its affiliated
         channels in accordance with the fee schedule referenced in the
         Insertion Order of this Agreement. The first payment of the foregoing
         fees shall be delivered to MS with a signed original of this Agreement.
         MS will invoice Advertiser for each subsequent installment, and
         Advertiser will pay such invoiced amounts within thirty (30) days after
         the date of such invoice. If MS fails to deliver the agreed upon number
         of ad requests during the agreed upon period pursuant to subsection (i)
         or (ii) above, Advertiser's sole remedy for such failure will be the
         extension of the period until the agreed upon number of ad requests (or
         other ad requests as the parties may agree) are provided.

         B.       MS will invoice Advertiser on a monthly basis, in arrears, for
         all amounts owing to MS pursuant to Section 4. Advertiser will pay each
         MS invoice pursuant to this paragraph within thirty (30) days after the
         date of such invoice, in readily available funds. All amounts are
         invoiced and payable in United States dollar currency. In addition to
         all other available rights and remedies, MS may cancel and remove any
         advertisement which is not paid for on a timely basis.

         C.       The fees, advances and other amounts owing to MS pursuant to
         these Standard Terms and Conditions and the attached IO do not include
         taxes or other governmental fees. Advertiser will pay all taxes and
         other governmental fees arising out of or related to all transactions
         undertaken pursuant to this Agreement, other than taxes on MS income
         and revenue, and will provide MS with appropriate evidence of such
         payment upon request.

5.       AUDITS: Upon request, but no more frequently than once in any twelve
         (12) month period, MS will provide Advertiser with the most recent
         process audit conducted by an independent auditing agency, pursuant to
         the then-current and applicable MS requirements.

6.       CANCELLATION: On March 1, 2001 or thereafter, either party shall have
         the right to terminate these Standard Terms and Conditions and the
         attached IO upon sixty (60) days written (email if followed by U.S.
         mail no later than the next business day) notice to the other party. If
         either MS or Advertiser defaults under this Agreement, the
         non-defaulting party will notify the other in writing. If the failure
         is not cured within ten (10) business days after written notice is
         received by the notified party, the non-

                                      -4-
<PAGE>

         defaulting party may, at any time prior to the default being cured,
         terminate this Agreement with no further obligation to the notified
         party; except for payment of any amount properly due MS pursuant to
         Section 4.

7.       ADVERTISER REPORTING: Advertiser shall develop, implement and maintain
         the technology required to track usage of the Advertiser site by users
         linking to the Advertiser site from the MSN Shopping Channel, WebTV
         and/or any other MS site, and will provide MS with monthly usage
         reports no later than thirty (30) days following the end of each month
         of the Term. Such reports shall include traffic from referring URL to
         the Advertiser site, number of page views, number of unique users
         (unique user information will be provided starting in the month
         following the integration of the technology necessary to do so), number
         of weekly orders, total revenue and average revenue per order.

8.       WARRANTIES: Advertiser warrants, represents and agrees that, during the
         Term of this Agreement, all products and/or services offered, sold or
         otherwise provided as part of the Advertiser site, and all Product
         Images (as defined in Section 11.C below): (a) are made, offered, sold
         or otherwise provided in compliance with applicable laws and will not
         infringe the copyrights, trademarks, service marks or any other
         proprietary, publicity or privacy right of any third party; (b) shall
         not be libelous, defamatory, obscene or pornographic; and (c) shall not
         violate other civil or criminal laws, including those regulating the
         use and distribution of content on the Internet and protection of
         personal privacy. Advertiser further warrants, represents and agrees
         that: (d) the Advertiser site is controlled and operated by Advertiser
         and/or its independent contractors and Advertiser will use commercially
         reasonable efforts to ensure that the Advertiser site will be
         functional and accessible at all times during the Term of this
         Agreement; (e) except as specifically provided for in the IO or as
         otherwise agreed to in writing by the parties, Advertiser will not use
         in any manner any trade names, trademarks, logos or product names of MS
         or its affiliated companies; (f) the Advertiser site and all actions
         occurring thereon during the Term of this Agreement are in compliance
         with all applicable laws; (g) the information technology, financial,
         operational, communication and other systems and processes used by
         Advertiser in connection with the Advertiser site shall not be
         interrupted or adversely affected by the manipulation, processing,
         comparison, display or calculation of dates from, into and between the
         twentieth and twenty-first centuries, including leap years; (h)
         Advertiser has the power and authority to enter into and perform its
         obligations under this Agreement; (i) Advertiser maintains and will
         maintain during the Term of this Agreement on Advertiser's site a clear
         privacy statement setting forth the information gathering,
         dissemination, privacy protection and other practices employed by
         Advertiser with respect to information collected by Advertiser from
         users, and Advertiser will adhere to all the provisions of such
         statement during the Term of this Agreement; and (j) Advertiser will
         use reasonable efforts during the Term of this Agreement to implement
         secure technology to protect user data for all commercial transactions
         following execution of this Agreement.

         MS warrants, represents and agrees that: (k) the MSN Shopping Channel
         and WebTV are in compliance with all applicable laws, and (I) MS has
         the power and authority to enter into and perform its obligations under
         this Agreement. Notwithstanding the foregoing, MS will not be
         responsible for third party content, products or services offered on
         the MSN Shopping Channel, WebTV or any Internet site owned, controlled
         or operated by MS or any of its affiliated companies and Advertiser
         will not be responsible for third party content, products or services
         offered by the MSN Shopping Channel, WebTV, or any Internet site owned,
         controlled or operated by MS or on any of its affiliated companies.

         THIS SECTION, SECTION 9, AND THE MS INSERTION ORDER FOR THIS CONTRACT
         CONTAIN THE ONLY WARRANTIES, EXPRESS OR IMPLIED, MADE BY ADVERTISER AND
         MS. ANY AND ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, ARE EXPRESSLY
         EXCLUDED AND DECLINED. EACH PARTY DISCLAIMS ANY IMPLIED WARRANTIES,
         PROMISES AND CONDITIONS OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
         PURPOSE, TITLE AND/OR NON-INFRINGEMENT, WHETHER AS TO THE MSN SHOPPING
         CHANNEL, WEBTV, THE ADVERTISER SITE, ANY SERVICES RENDERED BY MS OR
         ADVERTISER AND/OR THE TECHNOLOGY DEPLOYED IN CONNECTION THEREWITH.

9.       LINKS TO INTERNET SITES: Advertiser warrants and represents to MS that,

         during the Term of this Agreement, each Internet site identified by
         URLs in advertisements: (a) is controlled by Advertiser and operated by
         Advertiser and/or its independent contractors; (b) will use
         commercially reasonable efforts to ensure that the Advertiser site will
         be functional and accessible at all times; and (c) is in compliance
         with all applicable laws and regulations, and suitable in all technical
         respects to be linked to from the applicable site containing the
         advertisement. MS may refuse to provide links from the [*] or [*] to
         any materials on the Advertiser's site, or MS may reject any Advertiser
         content that, in MS' reasonable judgment (d) are factually inaccurate,
         misleading or deceptive; (e) infringe any third party intellectual
         property rights; (f) are libelous, defamatory, obscene or pornographic;
         (g) may violate other civil or criminal laws, including those
         regulating the use and distribution of content on the Internet and
         protection of personal privacy; and/or (h) contain any programs,
         application, interfaces or other functions that, given the nature of
         the [*] or [*] system and in MS' reasonable judgment would have a
         materially adverse effect on the [*] or [*] users' experience. In
         determining whether any materials on the Advertiser's site, or whether
         any Advertiser content would have a deleterious effect on the [*] or
         [*] users' experience, MS shall use standards consistent with those MS
         uses to determine quality standards for its other featured partners. MS
         may test Advertiser's URLs, and in MS' sole discretion may remove any
         URLs at any time that fail to comply with the above requirements.

                                      -5-









* Material has been omitted pursuant to a request for confidential treatment.
<PAGE>

10.      REMOVAL OF LINK: If MS receives a claim of infringement concerning the
         Advertiser link or advertisement or a claim which alleges a breach of
         Section 8, 9, 11.D., 11.E. and/or 11.F, the parties agree that MS may,
         in addition to any other remedies provided for herein, immediately
         remove the Advertiser link or advertisement from any and all MS
         site(s), pending receipt of a non-infringing replacement link or
         satisfactory resolution of the claim, and any such removal shall not
         constitute a breach of this Agreement. Advertiser must provide a
         non-infringing replacement link or advertisement (as applicable), or
         resolve the claim to MS' satisfaction, within forty-eight (48) hours of
         notification of the precise concern. Following the removal of any link
         pursuant to this Section 10, at such time as Advertiser has resolve the
         claim to MS's reasonable satisfaction, MS shall reinsert such link or
         advertisement. Advertiser's obligation to pay the fees in Section 4, if
         any, shall be suspended during any period that MS has removed the
         Advertiser link or advertisement from the MSN Shopping Channel or
         WebTV, as set forth in this Section. MS shall provide a technical
         contact to remedy any technical problems resulting from the improper
         insertion of the Advertiser's linking URLs that impact the security of
         the Advertiser's site.

                                      -6-

<PAGE>

11.      ADVERTISER OBLIGATIONS:

         A.       Advertiser will make regular updates of all pricing and
         inventory information available to MS in a reasonable time interval and
         in a format agreed to by the parties;

         B.       Advertiser will provide MS with thirty (30) days notice if it
         intends to modify the format in which it has provided pricing and
         inventory information;

         C.       Advertiser shall provide, to the extent such information
         exists, images for the products in its inventory in either gif or jpeg
         format ("Product Images"). Advertiser grants MS a non-exclusive,
         royalty free right and license to use the Product Images solely in
         conjunction with promotion of the Advertiser pursuant to this
         Agreement. MS acknowledges that its utilization of the Product Images
         will not create in it, nor will it represent it has, any right, title,
         or interest in or to such product images or other content contained on
         the Advertiser site other than the licenses expressly granted herein;

         D.       Advertiser shall be solely responsible for customer service
         for users linking to the Advertiser site through the MS site(s), for
         product support, quality and availability of products and/or services
         made available at the Advertiser site, fulfillment of orders and
         returns;

         E.       Advertiser shall ensure that all users of the Advertiser's
         site placing an order for product(s) and/or service(s) are timely
         advised of the status of such purchase(s) including the timely
         confirmation of all orders via electronic mail;

         F.       Advertiser shall provide electronic mail capabilities between
         the user and Advertiser;

         G.       Advertiser shall use its reasonable efforts optimize the
         Advertiser site for WebTV users by providing a "WebTV-friendly
         environment" and emphasizing clear page layouts designed for display on
         a television set, with a template that conforms to WebTV's website
         design guidelines for the size, color and layout of text and graphics;

         H.       Advertiser will enter into the standard MS Passport Wallet
         Service Agreement and MS Passport SDK License and Single Sign-In
         Service Agreement promptly following the execution of this Agreement,
         Advertiser agrees to deploy such MS Passport services no later than
         November 30, 2000; and

         I.       Advertiser agrees to participate in a case study for MS.

12.      INDEMNIFICATION: Each party agrees to indemnify, defend, and hold each
         other harmless from any and all actions, causes of action, claims,
         demands, costs, liabilities, expenses (including reasonable attorneys'
         fees) and damages arising out of or in connection with any claim made
         by a third party that, if true, would be (a) a breach by Advertiser of
         Sections 11.D., 11.E. and/or 11.F; or (b) a breach by such party of any
         representation or warranty set forth in this Agreement. If any action
         shall be brought against either party ("Claimant") in respect to any
         allegation for which indemnity may be sought from the other party
         ("Indemnifying Party") pursuant to the provisions of this Section 12,
         Claimant shall promptly notify Indemnifying Party in writing,
         specifying the nature of the action and the total monetary amount
         sought or other such relief as is sought therein. Claimant shall not
         settle or otherwise compromise any claim without the written consent of
         Indemnifying Party. Claimant shall cooperate with Indemnifying Party at
         Indemnifying Party's expense in all reasonable respects in connection
         with the defense of any such action. Indemnifying Party may upon
         written notice to Claimant undertake to conduct all proceedings or
         negotiations in connection therewith, assume the defense thereof, and
         if it so undertakes, it shall also undertake all other required steps
         or proceedings to settle or defend any such action, including the
         employment of counsel that shall be satisfactory to Claimant, and
         payment of all expenses. Claimant shall have the right to employ
         separate counsel and participate in the defense at Claimant's sole
         expense. Indemnifying Party shall reimburse Claimant upon demand for
         any payments made or loss suffered by it at any time after the date of
         tender, based upon the judgment of any court of competent jurisdiction
         or pursuant to a bona fide compromise or settlement of claims, demands,
         or actions, in respect to any damages to which the foregoing relates.

13.      LIMITATION OF LIABILITY: EXCEPT TO THE EXTENT ARISING PURSUANT TO
         SECTION 12 OR A BREACH OF SECTION 14, IN NO EVENT SHALL EITHER PARTY BE
         LIABLE FOR ANY CONSEQUENTIAL, INDIRECT, INCIDENTAL, SPECIAL OR
         EXEMPLARY DAMAGES WHATSOEVER, INCLUDING WITHOUT LIMITATION, DAMAGES FOR
         LOSS OF PROFITS, BUSINESS INTERRUPTION, LOSS OF OR UNAUTHORIZED ACCESS
         TO INFORMATION, AND THE LIKE, INCURRED BY THE OTHER PARTY ARISING OUT
         OF THIS AGREEMENT (PROVIDED THAT THIS LIMITATION SHALL NOT LIMIT EITHER
         PARTY'S OBLIGATION TO INDEMNIFY THE OTHER PARTY FOR THIRD PARTY CLAIMS
         WHICH INCLUDE SUCH DAMAGES), EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE
         POSSIBILITY OF SUCH DAMAGES. IN NO EVENT WILL EITHER PARTY OR ANY OF
         ITS AFFILIATES BE LIABLE TO THE OTHER PARTY FOR AN AMOUNT IN EXCESS OF
         THE TOTAL DOLLAR AMOUNT ACTUALLY RECEIVED BY MS FROM ADVERTISER FOR THE
         ADVERTISEMENT(S) AT ISSUE. As a matter of clarity, MS' affiliate, WebTV
         Networks, Inc., shall have no liability whatsoever to advertiser.

14.      CONFIDENTIALITY: Advertiser acknowledges that it has entered into a MS
         Non-Disclosure Agreement dated _____________, and the terms of such
         agreement shall be deemed incorporated herein, and further, that all
         terms and conditions of this Agreement shall be deemed Confidential
         Information as defined therein.

15.      PRESS RELEASES: Neither party will issue any press release or make any
         public announcement(s) relating in any way whatsoever to this Agreement
         or the relationship established by this Agreement without the express
         prior written consent of the other party, which consent shall not be
         unreasonably withheld, provided that MS may make informational
         references to MSN Shopping and/or WebTV Service Shopping Center, and
         Advertiser's participation therein in publicity and press releases
         without obtaining Advertiser's consent.

                                      -7-

<PAGE>

16.      GENERAL PROVISIONS: These terms and conditions are governed by the laws
         of the State of Washington, USA. All capitalized terms used herein
         shall have the same meaning as in the IO. Advertiser hereby irrevocably
         consents to the personal jurisdiction of, and non-exclusive venue for
         any legal proceedings or actions undertaken by or on behalf of
         Advertiser in, the state and federal courts located in King County,
         Washington. The prevailing party in any dispute concerning the subject
         matter hereof shall be entitled to recover its reasonable attorney's
         fees and costs. The parties agree that this Agreement is deemed to have
         been made in the State of Washington, USA. No joint venture,
         partnership, employment, or agency relationship exists between
         Advertiser and MS. Neither party shall be deemed to have waived or
         modified any of these terms and conditions except by a writing signed
         by its duly authorized representative. Neither party may assign its
         rights hereunder to any third party (other than to a person, firm or
         entity controlling, controlled by or under common control with the
         assigning party or in connection with a sale of all or substantially
         all of assigning party's assets) unless the other party expressly
         consents to such assignment in writing, which consent shall not be
         unreasonably withheld. Any attempted assignment, sub-license, transfer,
         encumbrance or other disposal without such consent shall be void and
         shall constitute a material default and breach of this Agreement. If
         any provision of these Standard Terms and Conditions is found invalid
         or unenforceable pursuant to judicial decree or decision, the remaining
         provisions shall remain valid and enforceable, and the unenforceable
         provisions shall be deemed modified to the extent necessary to make
         them enforceable. Unless specifically stated otherwise, the applicable
         territory for the advertising shall be the United States and Canada.
         All notices to MS relating to any legal claims or matters must be made
         in writing to Microsoft Corporation, One Microsoft Way, Redmond, WA
         98052-6399, attn. US Legal Group, Law & Corporate Affairs, attn: Ad
         Sales Attorney and will be deemed given as of the day they are received
         either by messenger, delivery service, or in the United States of
         America mails, postage prepaid, certified or registered, return receipt
         requested, and addressed to the party signing this Agreement. This
         Agreement constitutes the entire agreement between the parties with
         respect to the subject matter hereof and supersedes all prior and
         contemporaneous agreements or communications. This Agreement shall not
         be modified except by a written agreement dated subsequent to the date
         of this Agreement and signed on behalf of Advertiser and MS by their
         respective duly authorized representatives. This Agreement does not
         constitute an offer by MS and it shall not be effective until signed by
         both parties. Sections 5 (Audits), 7 (Advertiser Reporting), 8
         (Warranties), 10 (Removal of Link), 12 (Indemnification), 13
         (Limitation of Liability), 14 (Confidentiality) and 16 (General
         Provisions) shall survive any termination of this Agreement and will
         remain in full force, together with all rights and causes of action
         that may have accrued prior to termination, and any other provisions
         that might reasonably be deemed to survive such termination.

                                      -8-

<PAGE>
EXHIBIT A

MSN/REDENVELOPE

PROJECTED SESSIONS TO REDENVELOPE FROM [*]
[*]
[*] TOTAL EMAIL AD REQUESTS

GUARANTEED CLICK THRUS BASED ON A 10/23/00 PASSPORT WALLET IMPLEMENTATION

<TABLE>
<CAPTION>
MONTH         [ * ]       [ * ]      [ * ]         TOTALS
<S>           <C>         <C>        <C>           <C>
              ----------------------------------------------
JULY          [*            [*         [*
              ----------------------------------------------
AUG            *             *          *
              ----------------------------------------------
SEPT           *             *          *
              ----------------------------------------------
      Q1 Sub   *             *          *            [*
              ----------------------------------------------
OCT            *             *          *
              ----------------------------------------------
NOV            *             *          *
              ----------------------------------------------
DEC            *             *          *
              ----------------------------------------------
      Q2 Sub   *             *          *             *
              ----------------------------------------------
JAN            *             *          *
              ----------------------------------------------
FEB            *             *          *
              ----------------------------------------------
MAR            *             *          *
              ----------------------------------------------
      Q3 Sub   *             *          *             *
              ----------------------------------------------
APR            *             *          *
              ----------------------------------------------
MAY            *             *          *
              ----------------------------------------------
JUNE           *             *          *
              ----------------------------------------------
      Q4 Sub   *             *          *             *
              ----------------------------------------------
GRAND TOTAL    *]            *]         *]            *]
              ----------------------------------------------
</TABLE>

GUARANTEED CLICK THRUS BASED ON A 11/30/00 PASSPORT WALLET IMPLEMENTATION

<TABLE>
<CAPTION>
MONTH         [ * ]      [ * ]      [ *  ]        TOTALS
<S>           <C>        <C>        <C>            <C>
              ----------------------------------------------
JULY
              ----------------------------------------------
AUG
              ----------------------------------------------
SEPT
      Q1 Sub  [*         [*         [*             [*
              ----------------------------------------------
OCT
              ----------------------------------------------
NOV
              ----------------------------------------------
DEC            *          *          *
              ----------------------------------------------
      Q2 Sub   *          *          *              *
              ----------------------------------------------
JAN            *          *          *
              ----------------------------------------------
FEB            *          *          *
              ----------------------------------------------
MAR            *          *          *
              ----------------------------------------------
      Q3 Sub   *          *          *              *
              ----------------------------------------------
APR            *          *          *
              ----------------------------------------------
MAY            *          *          *
              ----------------------------------------------
JUNE           *          *          *
              ----------------------------------------------
      Q4 Sub   *          *          *              *
              ----------------------------------------------
GRAND TOTAL    *]         *]         *]             *]
              ----------------------------------------------
</TABLE>

* Material has been omitted pursuant
  to a request for confidential treatment.