Microsoft Corp. / WebTV Shopping Insertion Order [Amendment No. 1] - Microsoft Corp. and RedEnvelope Inc.
AMENDMENT TO
MICROSOFT CORPORATION/WEBTV SHOPPING INSERTION ORDER
This Amendment is made pursuant to that certain Microsoft Corporation/WebTV
Shopping Insertion Order (the "Agreement") dated September 15, 2000 by and
between Microsoft Corporation ("Microsoft") and RedEnvelope, Inc. ("Company")
and confirms the terms pursuant to which Company will participate in the MSN
Shopping Channel ("eShop") and WebTV Service Shopping Center ("WebTV").
Microsoft and Company hereby agree to modify the Agreement as follows, effective
immediately:
1. All references to "MS" and "Advertiser" in the Agreement shall be
deemed deleted, and the words "Microsoft" and "Company" shall
respectively be deemed inserted therein.
2. The parties agree that the Term, Total Fees and Order Summary outlined
in the Agreement shall be deemed deleted, and such elements shall be
amended and deemed inserted as set forth below:
ACCOUNT EXECUTIVE: KERRY BENJAMIN
EMAIL: KERRYB
<TABLE>
<S> <C> <C> <C>
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COMPANY: RedEnvelope, Inc. AGENCY:
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CONTACT: Chas Akers CONTACT:
201 Spear St. Suite 300
SF, CA 94105
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SITE URL: www.redenvelope.com TERM: July 1, 2001 - June 30, 2002
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TOTAL FEES: See Exhibit 1 - B
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Order Summary (see Exhibit 1-A attached):
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AD ELEMENTS ORDER TOTAL MONTHLY GUARANTEED FEE TOTAL ESTIMATED AD REQUESTS
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<S> <C> <C> <C>
[*] PLACEMENTS See Exhibit 1-B See Exhibit 1-B [*]
[*}
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[*] PLACEMENTS Included n/a [*]
[*]
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3. MAKE-GOOD POLICY: The parties agree that the following sentence shall
be deleted from Section 4.A of the Agreement: 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.
4. CANCELLATION: The parties agree that Section 6 of the Agreement shall
be deemed deleted, and the following shall be deemed inserted therein:
If either Microsoft or Company defaults under this Agreement, the
non-defaulting party will notify the other in writing. If the failure
is not cured within five (5) business days after written notice is
received by the notified party, the non-defaulting party may terminate
this Agreement immediately with no further obligation to the notified
party. Upon termination or expiration of this Agreement, other than by
Company due to an uncured default by Microsoft, Company will
immediately pay Microsoft any amounts of The Fee not yet paid, however,
Microsoft will be entitled to payment of Total Fees if it has provided
[*] ([*]) or more clicks to Company. If Company terminates due to an
uncured default by Microsoft, Company will be solely obligated to
render payment to Microsoft through the effective date of termination.
5. COMPANY REPORTING: In addition to the obligations set forth in
Section 7 of the Agreement, Company agrees to the following:
If Company participates in a seasonal or other Microsoft promotion
during the Term, Company shall develop, implement and maintain the
technology required to track usage of the Company site by users linking
to the Company site from [ * ],
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[ * ] and/or any other Microsoft site, and will provide Microsoft with
reports detailing the qualifying transaction activity including but not
limited to, the total number of qualifying transactions per customer
check-out, and the URL for the corresponding order confirmation page on
Company's site Company agrees to keep all usual and accurate records
necessary to verify such promotion reporting under this section.
6. USE OF NAME OR MARKS: Each party hereby grants to the other the right
during the Term to use, reproduce and publish the names and logos of
the other party solely in the manner contemplated by this Agreement.
Company must use the Microsoft names and logos in accordance with the
names and logo guidelines set forth at
http://www.microsoft.com/trademarks/t-mark/MS-Guide.htm as such
guidelines may be updated by Microsoft from time to time. Company shall
provide Company logos in accordance with the logo specifications
required by Microsoft. Each party shall retain all interest in its
logos, trade names, trademarks or service marks.
7. COMPANY OBLIGATIONS: In addition to the obligations set forth in
Section 11 of the Agreement, Company agrees to the following:
A. Company will make reasonable efforts to review the standard
Microsoft Passport Wallet Service Agreement and Microsoft
Passport SDK License and Single Sign-In Service Agreement
promptly following the execution of this Agreement. Company
agrees to upgrade current Microsoft Passport wallet service
known as PPEP and will make that service available under
existing referring URL restrictions, no later than November
15, 2001. Company will make reasonable efforts to deploy
Microsoft Passport SDK License and Single Sign-In service
within a reasonable time frame during the Term. In the event
Company's review indicates that either SDK or SSI fails to
deliver a satisfactory user experience or does not comply with
the current functionality of Company's site, Microsoft will
release Company from any further obligation to integrate any
similar technology for the remainder of the Term. If Company
has not deployed such Microsoft Passport services prior to
implementing additional third party wallet technologies on
Company's site, Microsoft Passport services will, upon
deployment, receive a location and size at least as prominent
as such third party wallet technology.
B. For each category in which Company has placement (i.e., the
"Desktop" category of the Hardware sub-department), Company
will provide Microsoft with a minimum of fifty (50) sku's for
MSN users ("Offers") throughout the Term. Offers may include,
but not be limited to, Company's products or other compelling
offers to increase MSN user response and Company's sales;
C. Company will provide Microsoft with a minimum of six (6)
optimized, exclusive offers for MSN Users ("Exclusive
Offers") throughout the Term. Exclusive Offers may include,
but not be limited to: (i) pervasive merchant discounts (i.e.,
dollar or percentage discounts off Company's entire inventory,
a specific category or any large set of products); (ii)
offer-specific discounts (i.e., an exclusive discount of a
specific sku for MSN users); (iii): channel specific offers
(i.e., offers exclusive to MSN users during the entire offer
period or presented to MSN users in advance of an offering via
another portal or channel); and/or (iv) bundled offers (i.e.,
offers tied to the purchase of another item [buy a 32" TV and
receive a discount on a DSS receiver]);
D. During sessions generated by users accessing Company's site
from MSN, Company will maintain a Microsoft eshop frame
("Frame"). Such Frame will: (i) be in a format designated by
Microsoft; (ii) include links back to eShop and MSN Search,;
(iii) will not include links to other eShop merchants; and
(iv) be subject to change;
E. Company will cookie (as such term is commonly understood in
the technology industry) MSN users. Such cookie will enable
MSN users to file an order either. (i) immediately upon
linking to Company's site from MSN; or (ii) within thirty (30)
days after the cookie is issued upon linking to Company's site
from MSN or any third party site. Company will credit
Microsoft for orders from such MSN users, provided that such
user places an order before the cookie expires;
F. Company will at its sole discretion maintain a "on MSN" logo
and URL on e-mail communications to its customers and
Company's catalogs and packing materials in shipped boxes per
Microsoft specifications; and
G. Company shall not implement and/or use technology which
prohibits users from using the "Back" button on such user's
browser to return to the prior site and/or any Microsoft site.
(Signature page follows)
MICROSOFT CONFIDENTIAL
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Except as specifically modified herein or in prior amendments, all other terms
and conditions of the Agreement shall remain in full force and effect. Whereby
the parties enter into this Amendment as of the later of the two signatures
dates below.
Microsoft Company
MICROSOFT CORPORATION REDENVELOPE, INC.
One Microsoft Way 201 Spear St. Suite 300
Redmond, WA 98052-6399 San Francisco, CA 94105
By /s/ [ILLEGIBLE] /s/ Martin W. McClanan
------------------------- -----------------------------------
(Sign) (Sign)
[ILLEGIBLE] Martin W. McClanan
---------------------------- -----------------------------------
Name (Print) Name (Print)
Unit Manager Chief Executive Officer
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Title Title
9/24/01 08/02/01
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Date Date
PROGRAM CONTACT: See Account Executive above
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EXHIBIT 1-A
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[*] AD ELEMENTS PROJ
IMPRESSIONS
(000,000)
<S> <C> <C>
[* [* [*
* * *
* * *
* * *
* * *
* * *
* * *
* * *
* * *
* * *
* * *
* * *
* * *
* * *
* * *
* * *
* * *
* * *
* * *
* * *
* * *
* * *
* * *
* * *
* * *
* * *
* * *
* * *
* * *
* * *
* * *
* * *
* * *
* * *
* * *
* * *
*] *] *]
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<S> <C> <C>
[* [* [*
* * *
* * *
* * *
* * *
* * *
* * *
* * *
* * *
* * *
* * *
*] *] *]
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<CAPTION>
PROJ
IMPRESSIONS
[*] AD ELEMENTS (000,000)
<S> <C> <C>
[*]
[* [* [*
* * *
* * *
* * *
* * *
* * *
* * *
* * *
* * *
*] * *
* *
[*] * *
[* * *
*] * *
* *
[*] * *
[* * *
* * *
*] *] *]
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PROJ
IMPRESSIONS
[*] AD ELEMENTS (000,000)
<S> <C> <C>
[*]
[*] [*] [*]
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<TABLE>
<CAPTION>
PROJ
[* IMPRESSIONS
*] AD ELEMENTS (000,000)
<S> <C> <C>
[*
* [* [*
* * *
* * *
* * *
*
* * *
* * *
*
* * *
* * *
*
*] *] *]
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[*] (including [*], [*] and [*]) ad requests are estimates for each site. The
actual ad request deliveries per MSN channel may differ from estimates, however,
the total number of ad requests are guaranteed.
Failure by Microsoft to meet a particular cost per acquisition or a certain
return on investment metric and/or provide a certain number of ad requests shall
not be deemed a breach of this Agreement or entitle Company to any legal remedy.
MICROSOFT CONFIDENTIAL
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EXHIBIT - B
The Total Fees shall be comprised of the following elements:
A. Fee. Company will pay Microsoft a flat fee of [*] dollars (US$[*]) (the
"Fee") in consideration for the guaranteed delivery of [*] ([*]) click
thrus derived solely from the elements set forth in Exhibit 1-A. The Fee
is a non-refundable, guaranteed payment to Microsoft. The Fee will be
rendered to Microsoft in twelve (12) monthly installments. The first
payment hereunder is due when this Agreement is signed and returned to
Microsoft. Microsoft will invoice Company for each month's payment, and
Company will pay such invoiced amounts within 30 days following the date
of such invoice.
B. Click fee. During the Term, Microsoft will guarantee to deliver clicks
to Company's site. After Microsoft provides [*] clicks ([*]) to
Company's site, Company will pay Microsoft a per click fee for each
click thereafter as set forth below:
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=======================================================================
POSSIBLE CLICK
CLICKS CLICK FEE FEES
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<S> <C> <C>
[*] $ [*] $ [*]
-----------------------------------------------------------------------
[*] $ [*] $ [*]
-----------------------------------------------------------------------
[*] $ [*] $ [*]
-----------------------------------------------------------------------
TOTAL MAXIMUM CONTRACT VALUE
(INCLUDING [*] FEE) $ [*]
=======================================================================
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C. Click Terms.
(i) Clicks will be delivered from the placements set forth in
Exhibit 1-A, the [*], [*] placements, or any other [*]
placements. Notwithstanding the foregoing, Microsoft will
obtain Company's prior approval if it intends to provide more
than [*]([*])[*] placements in any given month of the Term,
with the exception of December, February and May, when
Microsoft shall have the right to provide up to [*]([*]) such
placements. Microsoft will not provide clicks from alternate
placements, unless such placements are agreed upon in writing
by the parties. Company reserves the right to negotiate terms
for any alternate placement.
(ii) The parties will meet on a monthly basis during the Term to
monitor and manage clicks. Following each such meeting, the
parties may revise the placements in an effort to optimize
total clicks.
(iii) Total clicks hereunder will be based solely on Microsoft's
tracking reports.
(iv) Company will be billed for clicks actually delivered by
Microsoft, however, in no event will Microsoft be required to
refund or otherwise return to Company any portion of the Fee.
Company will render such click fees to Microsoft within thirty
(30) days after the date of each invoice.
(v) Microsoft is not obligated to deliver such clicks evenly
during the Term.
(vi) Company agrees that Microsoft's reporting will be the basis
for click fee billing. Microsoft will account for clicks on a
monthly basis, and will report such click activity to Company
during the Term.
(vii) If Microsoft fails to provide [*] ([*]) clicks during the
Term, Company's sole remedy for such failure will be the
extension of the Term until such clicks are provided.
(viii) If Microsoft falls short of any estimated monthly click
allocation amount (as such benchmarks are set forth in Exhibit
1-C, attached hereto) by more than [*] percent ([*]%),
Company will have the right to terminate the click portion of
this Agreement upon sixty (60) days' written notice to
Microsoft, Following Microsoft's receipt of such notice,
Microsoft will have the right to cure such shortfall. If
Microsoft remedies the click shortfall thru mutually agreed
upon placements prior to the proposed effective date of click
termination, the parties agree that Company's prior notice to
terminate the click portion of this Agreement shall be deemed
rescinded. If Company terminates the click portion of this
Agreement pursuant to this Section 1.C.viii, the parties will
be relieved of their respective obligations solely with regard
to clicks, except Company shall remain obligated to render
payment of any amount properly due Microsoft pursuant to
Exhibit 1-B, Section B through the effective date of click
termination.
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EXHIBIT 1-C
MONTHLY CLICK ALLOCATION
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MONTH ESTIMATED CLICKS
--------------------------------------
<S> <C>
July 2001 [*
--------------------------------------
August 2001 *
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September 2001 *
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October 2001 *
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November 2001 *
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December 2001 *
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January 2002 *
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February 2002 *
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March 2002 *
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April 2002 *
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May 2002 *
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June 2002 *
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CONTRACT TOTAL *]
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MICROSOFT CONFIDENTIAL
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