Interactive Services Agreement - America Online Inc. and SmartBargains.com LP
CONFIDENTIAL
INTERACTIVE SERVICES AGREEMENT
This Interactive Services Agreement (this "Agreement"), effective as of
September 12, 2003 (the "Effective Date"), is made and entered into by and
between America Online, Inc. ("AOL"), a Delaware corporation, with its principal
offices at 22000 AOL Way, Dulles, Virginia 20166, and SmartBargains.com, LP
("SmartBargains" or "SB"), a Delaware limited partnership, with offices at 10
Milk Street, Boston, Massachusetts 02108 (each a "Party" and collectively the
"Parties").
INTRODUCTION
A. SmartBargains operates a discount shopping interactive site at URL
www.smartbargains.com (the "Generally Available Site").
B. AOL desires that SmartBargains provide AOL Members with an AOL-branded
discount shopping interactive site based on the Generally Available Site
(the "Customized Site").
C. This relationship is further described below and is subject to the terms
and conditions set forth in this Agreement.
D. Capitalized terms used but not defined in the body of the Agreement shall
be as defined on Exhibit B attached hereto.
1. PROMOTION AND DISTRIBUTION; IMPRESSIONS.
1.1. DOTD COMMITMENT. Beginning on the Launch Date, AOL shall provide
SmartBargains with at least [**] (or a prorated number [**]) (as the
same may be increased pursuant to Section 1.2, the "DOTD
Commitment"), which Placements shall link to the Customized Site.
The DOTD Commitment shall be subject to the Makegood process set
forth in Section 1.1(b) below. "DOTD Placement" shall mean an [**]
promotion within [**] for a CS Product within the designated "Deal
of the Day" areas of the Welcome Screens (the "DOTD Area") which
DOTD Area shall, subject to Makegood process set forth in Section
1.1(a) below, be of comparable size and prominence to the size and
prominence of the AOL Deal of the Day portions of the AOL 9.0 Client
Welcome Screens as of the Launch Date. The Parties acknowledge that
notwithstanding the foregoing, nothing in this Agreement shall be
construed to limit AOL's right to redesign any part of the AOL
Network, including without limitation the AOL Service and the
Welcome Screen; provided, however, that if any redesign of the
Welcome Screen materially and adversely diminishes the size and
prominence of the DOTD Area for the DOTD Placements (a "Material
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Redesign"), then AOL shall provide SmartBargains with an amount of
Makegood Inventory calculated in accordance with the Makegood
Process set forth in Section 1.1(a) below. The Parties also
acknowledge that as of the Effective Date (i) each AOL User using
AOL version 8.0 or higher is able to select the version of the
Welcome Screen that such AOL User sees upon login to the AOL
Service, and (ii) not all versions of the Welcome Screen contain a
DOTD Area. Accordingly, the fact that some AOL offers and AOL Users
may select alternative versions of the AOL Client that do not have a
DOTD Area shall not be deemed a Material Redesign under this
Agreement. The Parties further acknowledge that the purpose of the
Makegood Process is to provide SmartBargains with traffic to the
Customized Site that reasonably approximates the loss in traffic
from the Material Redesign, although the Parties acknowledge and
agree that the delivery of the Makegood Inventory shall totally
satisfy AOL's obligation hereunder regardless of whether
SmartBargains receives more or less traffic to the Customized Site
than SmartBargains may have anticipated receiving but for the
Material Redesign. AOL shall be required to provide SmartBargains
with a number of additional DOTD Placements calculated in accordance
with the Makegood Process (the "Makegood Inventory") only if AOL has
not given SmartBargains at least [**]) days notice prior to any
Material Redesign. SmartBargains shall ensure that it has sufficient
inventory of the CS Product(s) to be marketed within any DOTD
Placement to satisfy AOL User demand for such CS Product(s), it
being acknowledged that if any Featured Product (as defined in
Exhibit A-1) does not link to a Sold-Out Product more than [**]
percent ([**]%) of the time within any calendar day when such DOTD
Placement is run during the Term such inventory will be deemed
sufficient.
(a) Material Redesign Makegood Written Process: As used in this
Agreement, the date on which AOL provides SmartBargains with
notice of a pending Material Redesign shall be referred to
herein as the "Redesign Notice Date". In the event that AOL
makes a Material Redesign and the Redesign Notice Date occurs
[**]) days or more before the date of the Material Redesign
(the "Redesign Date"), then SmartBargains shall not be
entitled to receive any Makegood Inventory in connection with
such Material Redesign. In the event that AOL makes a Material
Redesign and the Redesign Notice Date occurs within [**] days
of the Redesign Date, then AOL shall provide SmartBargains
with an amount of Makegood Inventory equal to the product of
(A) the number of Makegood Days multiplied by (B) the Makegood
CT Reduction.
(i) Makegood Days Calculation.
a. the Makegood Days shall initially equal [**];
b. For each DOTD Placement included within the DOTD
Commitment during the Primary Makegood Period, AOL
shall increase its Makegood Days by [**]; and
c. For each DOTD Placement included within the DOTD
Commitment during the Secondary Makegood Period,
AOL shall increase its Makegood Days by [**].
(ii) Makegood CT Reduction Calculation. The Makegood CT
Reduction shall equal the difference between
a. The average number [**] from the [**] DOTD
Placements in effect immediately prior to the
Material Redesign less
b. The average number [**] the [**] DOTD Placements
in effect immediately following such Material
Redesign.
(iii) Definitions.
a. "Primary Makegood Period" shall mean the period
commencing on the Redesign Date and ending on the
[**] Day Date (but if the [**] Day Date precedes
the Redesign Date, there shall be no Primary
Makegood Period).
b. "[**] Day Date" shall mean the date which is [**]
days after the Redesign Notice Date (or, if no
Redesign Notice is provided, [**] days after the
Redesign Date).
c. "Secondary Makegood Period" shall mean the period
commencing on the later to occur of (i) the [**]
Day Date and the (ii) Redesign Date, and ending on
the date which is [**] days after the [**] Day
Date.
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(b) Makegood for Shortfall of Delivery. In the event of a
shortfall in delivery of the DOTD Commitment, AOL shall
provide SmartBargains with advertising or promotional
inventory (including DOTD Placements, banners,
textlinks, emails and pop-ups) that AOL reasonably
believes will result in [**] ("Makegood Promotions"); it
being understood that if AOL has delivered all of the
Makegood Promotions in accordance with the terms of this
Agreement, AOL shall have no further liability to
SmartBargains as a result of the shortfall in delivery.
In the event that AOL is delivering DOTD Placements as a
makegood for placements missed from the DOTD Commitment,
the Parties agree that the following matrix will apply:
February - September October & January November December
[**] [**] [**] [**]
Thus, if AOL fails to deliver a committed DOTD Placement
in January, it would require [**] DOTD Placements in
February ([**] factor for Jan divided by [**] factor for
February equals [**]) to be deemed fulfilled.
Conversely, if AOL failed to deliver [**] DOTD
Placements otherwise committed in October, AOL would
only be obligated to provide [**] DOTD Placements in
December ([**] multiplied by [**] [October factor]
equals [**] divided by [**] [December Factor] equals
[**] December DOTD slots owed).
(c) Timing of Makegoods. AOL shall make commercially
reasonable efforts to deliver Makegood Inventory under
Section 1.1(a) and Makegood Placements under Section
1.1(b) within [**] days of the Material Redesign or
missed DOTD Placements, as the case may be.
1.2. INCREMENTAL DOTD PLACEMENTS. In addition to the DOTD
Commitment, AOL may, in its discretion, deliver additional
DOTD Placements ("Incremental DOTD Placements"). In the event
that it intends to provide SmartBargains with an Incremental
DOTD Placement, AOL will either give SmartBargains (i) [**]
days prior notice of such Incremental DOTD Placement (in which
case SmartBargains shall ensure that it has sufficient
inventory of the CS Product(s) to be marketed within such DOTD
Placement to satisfy AOL User demand for such CS Product(s)
(such sufficiency to be determined in accordance with Section
1.1 above) and such Incremental DOTD Placement will be added
to the DOTD Commitment for all purposes of Section 1.1 and
Section 1.2 above), or (ii) less than [**] days notice of such
Incremental DOTD Placement (in which case either (x)
SmartBargains shall give notice to AOL within [**] business
days that SmartBargains declines such opportunity, or
otherwise, (y) SmartBargains shall ensure that it has
sufficient inventory of the CS Product(s) to be marketed
within such Incremental DOTD Placement to satisfy AOL User
demand for such CS Product(s) (such sufficiency to be
determined in accordance with Section 1.1 above) and such
Incremental DOTD Placement will be added to the DOTD
Commitment for all purposes of Section 1.1 above and Section
1.2). The terms of this provision shall not be binding upon
either Party unless the offer by AOL or the declining of
acceptance by SmartBargains of Incremental DOTD Placements is
provided in writing (which may not be provided via email) and
in the case of AOL, is executed by both [**] (or their
successors). The Parties acknowledge that there may be
nonbinding
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communications (e.g. via email) relating to Incremental DOTD
Placements which nonetheless are not governed by this
provision (i.e., AOL may communicate availability of
placements which may be available to SmartBargains from time
to time).
1.3. INCREMENTAL PLACEMENTS. Nothing in Sections 1.1 or 1.2 shall
prevent AOL from offering, and SmartBargains from accepting,
incremental non-binding promotions to the Customized Site.
Moreover, AOL may promote the Customized Site through banners,
text links, emails and pop-ups in standard course unless
otherwise objected to by SmartBargains; provided that AOL
shall not be obligated to cease such promotions so long as AOL
reasonably believes that such promotions will not generate in
excess of [**]% of the [**] SmartBargains through the DOTD
Commitment.
1.4. COMPLIANCE WITH BBB ADVERTISING GUIDELINES. SmartBargains
shall ensure that (i) all offers, advertisements or other
Promo Content appearing within any of its Placements on the
AOL Network and (ii) all content within the Customized Site,
strictly comply with the then-current Better Business Bureau
Advertising Guidelines (the "BBB Guidelines"). The version of
the BBB Guidelines in effect as of the Effective Date is
attached hereto as Exhibit F. [**] the BBB Guidelines shall be
[**]. Without prejudice to any other remedy available to AOL
hereunder, SmartBargains shall immediately remove any Content
from the Placements or the Customized Site that AOL reasonably
believes may violate the BBB Guidelines.
1.5 ADDITIONAL PROMOTION. In recognition of the expenses incurred
by SmartBargains in connection with the creation of the
Customized Site, the Parties amended that certain Interactive
Marketing Agreement between the Parties, dated as of June 1,
2000, as amended to date (the "Existing Agreement"), pursuant
to a Ninth Amendment to Interactive Marketing Agreement
effective as of June 30, 2003 (the "Ninth Amendment"), to (i)
extend the term of the Existing Agreement through September
30, 2003, and (ii) provide that AOL will not be entitled to
[**] under the Existing Agreement after the Ninth Amendment
Effective Date (as defined in the Ninth Amendment), until [**]
have surpassed [**] dollars ($[**]) in aggregate
(notwithstanding any provision of the Existing Agreement, the
Ninth Amendment or this Agreement to the contrary, the amount
[**] to AOL (and value to SmartBargains) as a result of its
agreement to this Section 1.5(ii) shall be deemed to be [**]
dollars ($[**])).
2. PROGRAMMING AND CUSTOMIZED SITE
2.1 PROGRAMMING. SmartBargains shall provide AOL with the
Customized Site consisting of the Content described on the
programming plan attached as Exhibit A-1 (the "Programming
Plan"). SmartBargains shall ensure that the Customized Site
complies with the technical operating standards set forth in
Exhibit A-2 ("Operating Standards"). SmartBargains shall
customize the Customized Site for AOL Members as follows:
(a) Branding and Navigation. SmartBargains shall ensure that
the Customized Site displays AOL branding as set forth
on Exhibit A-3; provided that AOL may request up to [**]
of the Term subject to paying [**] percent ([**]%) of
SmartBargains' actual costs incurred in implementing
such change; such costs may be paid [**] in Section 3.1
for such costs to be paid by AOL.
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(b) Advertising. Notwithstanding anything to the contrary in
this Agreement, SmartBargains shall ensure that the
Customized Site does not promote, advertise, market or
distribute products, services or Content of any other
Interactive Service. Neither party shall be entitled to
include any third party advertisements or links on the
Customized Site without the prior mutual agreement of
AOL and SmartBargains, except as required by any
integration of Marketplace Integration Software
Providers (as defined in Section 2.4) pursuant to
Section 2.4.
(c) Domain Name. SmartBargains shall host all pages of the
Customized Site under a domain name co-branded with the
AOL Service (i.e., smartbargains.aol.com), or under such
other domain name as shall be necessary for AOL to
receive primary credit for the traffic to the Customized
Site from all third party measurement services; except
that images on the Customized Site may be served from
SmartBargains' subdomains or a content distribution
network such as Akamai. It is understood that
SmartBargains has no authority over the AOL domain and
relies completely on AOL to promptly create and modify
its DNS records. AOL will ensure that all host names,
subdomains, domains, certificates, addresses, security
settings and related entities are fully and properly
configured
(d) Cul-de-sac Site. AOL shall have the right to approve any
hyperlinks from the Customized Site. The Parties intend
that the Customized Site will provide AOL Members the
opportunity to conduct transactions through the
Customized Site and then return such AOL Members back to
the AOL Network.
2.2 PREPARATION OF CUSTOMIZED SITE. SmartBargains shall complete
the Customized Site and Content Preparation for external use
by September 15, 2003 ("Launch Date") which Customized Site
will be functional and available for internal testing by
September 8, 2003. For each day after the Launch Date that
SmartBargains fails to cause such completion of the Customized
Site, SmartBargains will pay to AOL [**] dollars ($[**]),
provided that in no event shall SmartBargains' liability under
this Section 2.2 exceed $[**] in the aggregate. Any features
or functionality not included in Exhibit A-1 must be mutually
agreed to by the Parties and may require additional payments
by AOL and may delay the Launch Date with no penalty to either
Party; provided that any discrepancies under this sentence
(e.g., clarifications of obligations vs. additional
obligations) shall be resolved pursuant to the dispute
resolution process in Section 1 of Exhibit D. In the event
SmartBargains has not completed Site and Content Preparation
within [**] days after the Launch Date, then in addition to
any other remedies available, AOL shall have the right to
terminate this Agreement by giving SmartBargains written
notice thereof. AOL will complete the items within the
timeframes listed in Exhibit [F] provided, however, that if
SmartBargains is unable to launch the Customized Site by the
Launch Date solely as a result of AOL's inability to carry out
its obligations on Exhibit [F] collectively, then for each day
that the Launch Date is delayed AOL will waive the $[**]
penalty and provide SmartBargains with an Incremental DOTD
Placement with [**] attached to it, provided that in no event
shall AOL be required to provide more than [**] Incremental
DOTD Placements pursuant to this sentence.
2.3 CUSTOMER DATA. Subject to the last sentence of this Section
2.3, AOL shall own all data obtained by SmartBargains pursuant
to this Agreement. SmartBargains shall ensure that on the
first page of the Customized Site, a prominent notice to AOL
Users (the form and content to be provided by AOL) will notify
such AOL Users that its information will be owned by AOL. At
least [**] prior to the expiration of the Term, AOL and
SmartBargains will enter into negotiations [**] to be in
effect upon expiration of the Term. If by
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the end of the Term, AOL and SmartBargains have not mutually
agreed upon [**] and at any time thereafter SmartBargains
provides formal notice to AOL that it is breaking off
conversations regarding [**] (the "Break Off Notice"), then
AOL will enable SmartBargains to [**] as follows: commencing
within [**] days after the Break Off Notice AOL will for a
period of [**] [**]on SmartBargains [**], which will be [**]
than the [**] historically provided to SmartBargains, to [**]
for whom AOL has acquired the right [**].
2.4 MARKETPLACE INTEGRATION SOFTWARE PROVIDERS. SmartBargains will
work with potential partners designated by AOL and agrees to
integrate a software solution offered by a Marketplace
Integration Software Providers into the Customized Site by
[**]. For purposes hereof, "Marketplace Integration Software
Providers" shall mean a software and services organization
which provides an electronic means for presenting and
processing inventory for large manufactures or retailers onto
Internet-based marketplaces, but does not take physical
possession or legal title of any inventory (e.g. Channel
Advisor, AuctionWorks). Such potential partners and
SmartBargains shall enter into mutually agreeable
confidentiality agreements regarding the protection of their
respective confidential and proprietary information.
3. [**] REPORTS AND AUDIT RIGHTS
3.1 [**]. SmartBargains shall pay AOL on a monthly basis, within
[**] days of the end of any month during the Term, an amount
[**]. "[**]" shall mean the aggregate amounts [**] of the
Customized Site in connection with the [**] of any [**]
through the Customized Site, excluding, in each case, (a)
[**], (b) [**], and (c) [**] (only if and to the extent that
such [**] reflect SmartBargains' [**]). Upon mutual agreement,
the Parties may agree to [**] in order to facilitate
incremental drop-ship relationships.
3.2 REPORTS. No later than thirty (30) days after the end of each
month during the Term, SmartBargains will provide AOL with a
final monthly report ("Final [**] Report") containing for each
month the details about the [**] (including all calculations
used to determine the [**] amount, such as [**] both for each
DOTD Promotion and a summary of all other Promotions). AOL
shall be entitled to rely on each of the Final [**] Reports
for the sole purpose of determining [**], and SmartBargains
shall not modify any of these reports after submitting them to
AOL. The reports required under this section will comply with
the format requests from AOL and shall be auditable by AOL in
accordance with Section 3.3 of the Agreement. For the
avoidance of doubt, any cancellations or returns made after a
Final [**] Report is submitted to AOL [**].
3.3 AUDIT RIGHTS. For the sole purpose of ensuring compliance with
this Agreement, AOL shall have the right to engage an
independent certified public accountant to conduct a
reasonable and necessary inspection of portions of the books
and records of SmartBargains which are relevant to
SmartBargains's performance pursuant to this Agreement. Any
such audit may be conducted after twenty (20) business days
prior written notice to SmartBargains. AOL shall bear the
expense of any audit conducted pursuant to this paragraph
unless such audit shows an error in AOL's favor amounting to a
deficiency to AOL in excess of five percent (5%) of the actual
amounts paid and/or payable to AOL hereunder, in which event
SmartBargains shall bear the reasonable expenses of the audit.
SmartBargains shall pay AOL the amount of any deficiency
discovered by AOL within thirty (30) days after receipt of
notice thereof from AOL. AOL shall not have the right to audit
more than one time in any six-month period.
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3.4 NO CREDIT FOR EXISTING AGREEMENT. No promotions, sales or
revenue generated under this Agreement shall be deemed a
credit or otherwise be counted for any purpose under the
Existing Agreement as the same has or may be amended.
4. AOL TOOLS. SmartBargains shall use AOL's utilities and technologies
("AOL Tools"), subject to AOL's standard license agreements for such
tools, as follows:
4.1 NON-MERCHANDISING TOOLS ON CUSTOMIZED SITE . To the extent
SmartBargains uses any of the following tools or functionality
within the Customized Site, SmartBargains shall use the
comparable AOL Tools only: instant messaging and calendaring
(including "click-to-add event" functionality associated
therewith). Any registration process permitted hereunder shall
permit AOL Members to utilize AOL's screenname authentication
functionality and SmartBargains shall display such
functionality as prominently as any other method of
registration. In addition, the Customized Site shall not (i)
provide or promote any email service or aggregated
shopping/commerce features or functionality (e.g. an online
mall), or (ii) use or feature the tools or technology of any
Interactive Service other than AOL. AOL will use commercially
reasonable efforts to facilitate SmartBargains' use of these
non-merchandising tools, and any new tools developed by AOL
after the Effective Date will be added on a mutually agreeable
basis; if AOL agrees to [**] to integrate any [**],
SmartBargains agrees to provide such integration in a
reasonable time and subject to reasonable expense.
4.2 MERCHANDISING TOOLS ON CUSTOMIZED SITE. SmartBargains will
conform its promotion and sale of CS Products through the
Customized Site to the then-existing technologies identified
by AOL which are optimized for the AOL Service. Specifically,
SmartBargains shall (a) participate in AOL Quick Checkout, and
(b) participate in AOL's "product search" tool technology
which allows AOL Members to run a customized search among
SmartBargains's detailed inventory data ("AOL Product
Search"). AOL will use commercially reasonable efforts to
facilitate SmartBargains' use of these merchandising tools,
and any new tools developed by AOL after the Effective Date
will be added on a mutually agreeable basis; if AOL agrees to
pay all actual costs incurred by SmartBargains to integrate
any new tools, SmartBargains agrees to provide such
integration in a reasonable time and subject to reasonable
expense.
5. TERM, TERMINATION, PRESS RELEASES.
5.1. TERM. Unless earlier terminated as set forth herein, the
initial term of this Agreement shall commence on the Effective
Date and expire March 8, 2005 (the "Initial Term"). Each Party
shall have the [**] this Agreement [**], provided that AOL may
[**] and SmartBargains may [**].
5.2 TERMINATION FOR BREACH. Either Party may terminate this
Agreement at any time in the event of a material breach by the
other Party which remains uncured after thirty (30) days
written notice thereof.
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5.3 TERMINATION FOR BANKRUPTCY/INSOLVENCY. Either Party may
terminate this Agreement immediately following written notice
to the other Party if the other Party (i) ceases to do
business in the normal course, (ii) becomes or is declared
insolvent or bankrupt, (iii) is the subject of any proceeding
related to its liquidation or insolvency (whether voluntary or
involuntary) which is not dismissed within ninety (90)
calendar days or (iv) makes an assignment for the benefit of
creditors.
5.4 TERMINATION FOR CHANGE OF CONTROL. AOL may terminate this
Agreement upon written notice to SmartBargains in the event of
any Change of Control of SmartBargains which results in
SmartBargains (i) controlling any substantial interest in, or
(ii) being controlled by, or being under common control with,
an Designated Entity. For purposes of this Agreement,
"Designated Entity| shall mean (i) any entity that offers,
directly or through any Affiliate, an Internet connectivity or
ISP service, or (ii) any of the following entities or any
Affiliate of such entities: [**].
6. EXHIBITS AND STANDARD TERMS. All Exhibits attached hereto and are
hereby made a part of this Agreement.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of
the Effective Date.
AMERICA ONLINE, INC. SMARTBARGAINS.COM LP
By: /s/Robert Hayes By: /s/Ben Fischman
--------------------------- ------------------------------
Print Name: Robert Hayes Print Name: Ben Fischman
Title: [illegible] E-Commerce Title: EVP Strategic Development
Date: 9/15/03 Date: 9/15/03
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EXHIBIT A-1: PROGRAMMING PLAN
A. GENERAL:
1. VISION. An online store that offers members a wide variety of
categories with big brands, deeply discounted, new items. Exclusive offerings
will be made available only for AOL members.
2. PRODUCT SUMMARY. The Liquidations destination is designed to be a fully
functional e-commerce platform that enables customers to purchase a wide variety
of goods from a wide variety of merchant sources - in a single transaction. The
Liquidations store will better serve AOL members looking for mature products in
the product lifecycle with deep discounted prices. Currently we only partially
serve these members and feel we can do a much better job moving forward.
Secondarily, we hope to help merchants liquidate late in lifecycle merchandise.
The Liquidations destination will offer goods available to members both through
"Liquidation Events" as well as through a fully functional eCommerce store that
will be available as a "Liquidation Destination".
3. BENEFIT TO OUR AOL MEMBERS. Our members will have access to an
exclusive Liquidations destination with an enormous assortment of well-known
branded products at unparalleled values. They will be presented with new events
and limited opportunities daily, building a shopping experience with a sense of
excitement and urgency. They do not have to wait for an auction to end or bid on
a product, since the prices are fixed. They can purchase items from multiple
vendors and streamline their checkout process by leveraging an AOL Wallet.
4. BENEFIT TO OUR SELLERS. Sellers will be able to quickly liquidate
excess inventory to a large audience of AOL members. By participating in the AOL
Outlet, sellers will have another sales channel that does not cannibalize their
full-line products and pricing. Their products will provide better returns by
reducing their mature product inventory in large volumes and shortening their
product life cycle.
B. PRODUCT REQUIREMENTS: As more specifically provided in this Exhibit A-1,
SmartBargains shall be responsible for all programming, creative development,
functionality and continuing operations on the Customized Site; as relevant, the
Customized Site must adhere to AOL Studio guidelines and changes must be
approved by AOL (process to be agreed upon by both Parties).
For purposes of Section 2.2, Launch Date shall be deemed when SmartBargains has
completed to the reasonable satisfaction of AOL all Features identified by an
AOL Priority of P0. All items designated with an AOL Priority of P1 shall be
completed no less than [**] days following the Launch Date.
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Operational and Performance Requirements
[**]
SB will [**]
SB will inform AOL as to the
ACTION PROMPTED BY MEMBER [**] Launch Date.
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[**] [**]
[**] [**]
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[**] [**]
- Site uptime: [**]%
- Maintenance window: no more than [**] window, [**] a week. If SB requires
more frequent or longer update periods, AOL shall agree to discuss in good
faith to approve such changes to the maintenance window. Efforts will be
made to conform to the AOL standard maintenance window [**].
13
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APPENDICES
APPENDIX A - REPORTS PROVIDED BY SMARTBARGAINS
[**] REPORTS
[**] Reports, which will be available to AOL via the Internet. [**].
[**] SALES [**]
[**] SALES [**]
[**] SALES [**]
SALES [**]
SALES [**]
SALES [**]
SALES [**]
SALES AOL
OUTLETS
FLASH REPORT THRU 09/07/03
SUMMARY
($000S EXCEPT [** [*
AVG ORDER SIZE & [**] ] [**] *] [**]
AVG SELLING PRICE) ----------------------------------------------- -------------------------------------- -----------
[**] [**] [**] [**] [**] [**] [**] [**]
[**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**]
14
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SUN 09/01 [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**]
MON 09/02 [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**]
TUE 09/03 [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**]
WED 09/04 [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**]
THU 09/05 [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**]
FRI 09/06 [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**]
SAT 09/07 [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**]
WEEK 1 [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**]
SUN 09/08 [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**]
MON 09/09 [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**]
TUE 09/10 [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**]
WED 09/11 [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**]
THU 09/12 [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**]
FRI 09/13 [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**]
SAT 09/14 [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**]
WEEK 2 [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**]
SUN 09/15 [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**]
MON 09/16 [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**]
TUE 09/17 [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**]
WED 09/18 [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**]
THU 09/19 [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**]
FRI 09/20 [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**]
SAT 09/21 [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**]
WEEK 3 [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**]
SUN 09/22 [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**]
MON 09/23 [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**]
TUE 09/24 [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**]
WED 09/25 [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**]
THU 09/26 [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**]
FRI 09/27 [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**]
SAT 09/28 [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**]
WEEK 4 [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**]
15
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MTD ACTUALS [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**]
16
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EMAIL REPORTING
BRAND DRIVEN PERFORMANCE
BRAND CLICKS SALES
----- ------ -----
[**] [**] $[**]
[**] [**] $[**]
[**] [**] $[**]
[**] [**] $[**]
[**] [**] $[**]
[**] [**] $[**]
[**] [**] $[**]
[**] [**] $[**]
[**] [**] $[**]
17
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TOP 50 SEARCH TERMS WEEK OF 8/4
TOP 50 SEARCH TERMS COUNT
------------------- -----
[**] [**]
[**] [**]
[**] [**]
[**] [**]
[**] [**]
[**] [**]
[**] [**]
[**] [**]
[**] [**]
[**] [**]
[**] [**]
[**] [**]
[**] [**]
[**] [**]
[**] [**]
[**] [**]
[**] [**]
[**] [**]
[**] [**]
[**] [**]
[**] [**]
[**] [**]
[**] [**]
[**] [**]
[**] [**]
[**] [**]
[**] [**]
[**] [**]
18
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[**] [**]
[**] [**]
[**] [**]
[**] [**]
[**] [**]
[**] [**]
[**] [**]
[**] [**]
[**] [**]
[**] [**]
[**] [**]
[**] [**]
[**] [**]
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[**] [**]
[**] [**]
[**] [**]
[**] [**]
[**] [**]
19
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APPENDIX B - MERCHANDISE PLAN
SB will follow the assortment guidelines and provide documentation as
requested below:
1. For Main Page:
a. A Featured Product Calendar detailing products [**] in
advance.
b. If there are changes to the Featured Product Calendar,
which will not exceed [**]% of scheduled Feature
Product, SB will provide [**] days advance written
notice of that change to AOL, unless AOL agrees to a
lesser period of time.
c. The Featured Product will not come from any one
department [**]% of the time and in any one month, the
featured product must come from at least [**]different
departments, unless approved by AOL.
d. In any given month the Featured Product must promote a
nationally advertised branded(1) product at least [**]%
of the time, unless approved by AOL.
2. For each Department:
a. Average of [**] products per Department.
b. Featured Product for each Department which will refresh
[**].
c. Target and Minimum Brand Mix: In Departments where
brands apply (e.g., Electronics, Men's Store, Women's
Accessories, Women's Apparel), [**]% of the listings
should be nationally advertised brands(1) and no one
brand should constitute more than [**]% of the listings,
unless approved by AOL.
3. For each Category:
a. Minimum of [**] products per Category, unless approved
by AOL.
b. Featured Product for each Category on AOL Outlets will
be different from Featured Product on Smartbargains.com,
however the order of products listed on AOL Outlets will
be the same as Smartbargains.com.
c. Product descriptions and copy on Category pages will not
be unique to AOL Outlets. SB agrees to make changes to
product descriptions and copy in reasonable time frame
when requested.
4. Overall
a. Ordering Rules: SB orders product listings on pages
based on product [**] or mutually agreed merchandising
rules (and without regard to [**]whatsoever); 3rd party
listings will not be discriminated against in listings
or otherwise.
b. Discount Objectives ([**]% off MSRP or greater).
c. Assortment Plan: [**] SB will present a written
Assortment plan, subject to AOL approval, which will
include promotions for the Main Page, as well as Key
Items or events occurring in the Departments/Categories
the following [**].
----------
(1) Brands that are advertised nationally in TV or print media, not regional.
20 CONFIDENTIAL
<PAGE>
i. In addition, SB will provide, a Main Page Featured
Product(s) Calendar detailing items, promotional
offer and quantity available for sale [**] in
advance.
ii. SB will provide Department Page Featured Item
Calendar detailing items, promotional offer and
quantity available for sale [**] in advance.
d. SB will present to AOL a written Exclusive Product Plan
indicating all products, prices, quantities that SB
intends to make available exclusively on AOL.
i. Minimum of [**] exclusive products per department.
ii. At a minimum AOL exclusive product assortment will
be refreshed [**]. On high volume departments AOL
exclusive product assortment will be refreshed
with greater frequency.
21
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APPENDIX C - CALL CENTER SUPPORT SERVICE LEVEL STANDARDS
The following Call Center Performance Standards shall be deemed to be in effect
until otherwise mutually agreed upon by the Parties.
PERFORMANCE INDICATOR SERVICE LEVEL AGREEMENT
--------------------- -----------------------
[**] [**] PERCENT [**].
[**] WITHIN [**]
[**] [**]
[**] [**]
[**] LESS THAN [**]%
[**] WITHIN [**]
[**] [**] WITHIN [**]
[**] [**] WILL BE SENT TO AOL [**]
[**] [**] PRODUCT [**]
[**] SB AND AOL WILL AGREE [**]
22
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EXHIBIT A-2: TECHNICAL OPERATING STANDARDS
1. Customized Site Infrastructure. SmartBargains will be[**].
2. [Intentionally Blank]
3. Technical Problems. SmartBargains agrees [**].
4. Monitoring. SmartBargains will [**].
5. Telecommunications. [**].
6. Security. SmartBargains will [**]. SmartBargains will [**] [**].
7. Technical Performance.
i. SmartBargains will [**]
ii. [**] SmartBargains [**], SmartBargains shall [**].
iii. SmartBargains will [**].
iv. SmartBargains will [**].
v. [**] SmartBargains will [**].
8. AOL Internet Services SmartBargains Support. [**] SmartBargains.
23
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EXHIBIT B: DEFINITIONS
The following definitions shall apply to this Agreement:
ADVERTISEMENTS. Advertisements, promotions, links, pointers and similar services
or rights.
AOL AFFILIATE. Any distributor or franchisee of AOL, or an entity that, directly
or indirectly, controls, is controlled by, or is under common control with AOL,
including any entity in which AOL holds, directly or indirectly, at least a [**]
percent ([**]%) equity interest.
AOL FRAMES. The frame (and any other visible elements of client software)
appearing around the Customized Site when an AOL Member is viewing such site.
AOL LOOK AND FEEL. The elements of graphics, design, organization, presentation,
layout, user interface, navigation, trade dress and stylistic convention
(excluding the digital implementations thereof done by SmartBargains) which are
generally associated with interactive sites within any AOL Property, or any
other AOL interactive site or service.
AOL MEMBER(S). Any user of the AOL Network, including authorized users
(including any sub-accounts under an authorized master account) of the AOL
Service and/or the CompuServe Service.
AOL NETWORK. (i) The AOL Properties, and (ii) any other product, service or
property owned, operated, distributed or authorized to be distributed by or
through AOL or any AOL Affiliate worldwide (and including those properties
excluded within the definition of the AOL Properties). It is understood and
agreed that the rights of SmartBargains relate solely to the AOL Properties and
not generally to the AOL Network.
AOL PROMO. The creative materials provided by SmartBargains for display on the
AOL Network.
AOL SERVICE. The US version of the America Online-brand Service, subject to the
AOL Standard Service Exclusions.
AOL STANDARD SERVICE EXCLUSIONS. With respect to any AOL Property (or other AOL
interactive site or service), such site or service shall specifically exclude:
(a) all other AOL interactive sites (e.g., the "AOL Service" shall exclude,
e.g., AOL.com, Netscape, MovieFone.com, CompuServe.com, ICQ.com, etc.) or AOL
interactive services (e.g., the "AOL Service" shall exclude, e.g., the
CompuServe service, ICQ, AOL Instant Messenger, etc.); (b) any international
versions of such site or service (e.g., the "AOL Service" shall exclude, e.g.,
AOL Europe and AOL Japan), (c) any independent product, service or property,
which may be offered by, through or with the applicable AOL site or service
(e.g., "You've Got Pictures(TM)," "Shop@," "NetMail(TM)," "Love@AOL", "AOL
Hometown," "My News", "Netbusiness"), (d) any programming or Content area
offered by or through such site or service over which AOL does not exercise
complete operational control (including, without limitation, content areas
controlled by other parties and member-created content areas), (e) any yellow
pages, white pages, classifieds or other search, directory or review services or
Content offered by or through the U.S. version of the applicable site or
service, (f) any property, feature, product or service which AOL or its
affiliates may acquire subsequent to the Effective Date and (g) any other
version of the applicable site or service which is materially different from the
standard narrow-band U.S. version of the applicable site or service, by virtue
of its branding, distribution, functionality, Content or services (e.g., in the
case of Digital City, excluding, e.g., Digital City, Inc.'s "YourTown" branded
cities or any other similar "light" product offering), including, without
limitation, any private-label or co-branded version of the applicable site or
service or any version distributed through any broadband distribution platform
or through any platform or device other than a desktop personal computer (e.g.
with respect to "Netscape", excluding, e.g., any custom Netcenters built
specifically for third parties).
AOL TOOLS. AOL's tools and functionalities.
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 1934,
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.
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 Purchasers
and SmartBargains customers (in their capacities as SmartBargains 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) the receiving Party can demonstrate was 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 not in breach of any confidentiality obligation to the disclosing
Party.
CONTENT. Text, images, video, audio (including, without limitation, music used
in time relation with text, images, or video), and other data, products,
services, advertisements, promotions, URLs, keywords and other navigational
elements, links, pointers, technology and software, including any modifications,
upgrades, updates, enhancements and related documentation.
CS PRODUCTS. Products offered for sale or promoted on the Customized Site.
INTERACTIVE SERVICE. An entity offering one or more of the following: (i) online
or Internet connectivity services (e.g., an online service or Internet service
provider); (ii) an interactive site or service featuring a broad selection of
aggregated third party interactive content (or navigation thereto) covering a
broad range of subjects and targeted at a broad audience (e.g., a search and
directory service or portal); or (iii) communications software capable of
serving as the principal means through which a user creates, sends or receives
electronic mail or real time online messages.
KEYWORD(TM) SEARCH TERMS. (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 SmartBargains (and determined in
accordance with the terms of this Agreement) and (b) the Go Word online search
terms made available on the CompuServe Service, combining CompuServe's Go Word
online search modifier with a term or phrase specifically related to
SmartBargains (and determined in accordance with the terms of this Agreement).
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LICENSED CONTENT. All Content offered through the Customized Site pursuant to
this Agreement or otherwise provided by or on behalf of SmartBargains or its
agents in connection herewith (e.g., offline promotional content or online
Content for distribution through the AOL Network).
PRESS RELEASE. A press release or other public statement.
PRODUCT. Any product, good or service which SmartBargains (or others acting on
its behalf or as distributors) offers, sells, provides, distributes or licenses
to AOL Members directly or indirectly through (i) the Customized Site (including
through any Interactive Site linked thereto), (ii) any other electronic means
directed at AOL Members (e.g., e-mail offers) specifically authorized by this
Agreement, or (iii) an "offline" means (e.g., toll-free number) for receiving
orders related to specific offers within the Customized Site requiring
purchasers to reference a specific promotional identifier or tracking code,
including, without limitation, products sold through surcharged downloads (to
the extent expressly permitted hereunder).
PROMO CONTENT. Content provided by SmartBargains to AOL for inclusion within a
DOTD[**]Placement.
PROMOTIONAL MATERIALS. Any and all marketing, advertising, or other promotional
materials, excluding Press Releases, related to the Customized Site and/or
referencing the other Party and/or its trade names, trademarks, and service
marks.
SUBLICENSE. To grant a sublicense (i) of any of the rights granted to AOL
hereunder to AOL Affiliates, and (ii) to AOL Members to use the Licensed Content
in accordance with the applicable AOL Member end user license agreements.
WELCOME SCREENS. The first full page or screen of the AOL Service after an AOL
Users logs on to the AOL Network (specifically excluding any log-on "pop-up" or
other similar interim advertisement or promotion).
CONFIDENTIAL
25
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EXHIBIT C
STANDARD ONLINE COMMERCE TERMS & CONDITIONS
- AOL Network Distribution. The Placements and any other promotions or
advertisements purchased from or provided by AOL will link only to the
Customized Site, will be used by SmartBargains solely for its own benefit
and will not be resold, traded, exchanged, bartered, brokered or otherwise
offered to any third party. SmartBargains will not authorize or permit any
third party to distribute or promote the CS Products or any SmartBargains
Interactive Site through the AOL Network absent AOL's prior written
approval.
- Provision of Other Content. In the event that AOL notifies SmartBargains
that (A) as reasonably determined by AOL, any Content within the
Customized Site violates AOL's then-standard Terms of Service (as set
forth on the America Online(R) brand service at Keyword term "TOS"), for
the AOL Service or any other AOL property through which the Customized
Site is promoted, the terms of this Agreement or any other standard,
written AOL policy (including, without limitation, AOL's policies on (i)
kids and teens content, (ii) advertising, or (iii) games rating) or (B)
AOL reasonably objects to the inclusion of any Content within the
Customized Site (other than any specific items of Content which may be
expressly identified in this Agreement), then SmartBargains will take
commercially reasonable steps to block access by AOL Users to such Content
using SmartBargains's then-available technology. In the event that
SmartBargains cannot, through its commercially reasonable efforts, block
access by AOL Users to the Content in question, then SmartBargains will
provide AOL prompt written notice of such fact. AOL may then, at its
option, restrict access from the AOL Network to the Content in question
using technology available to AOL. SmartBargains will cooperate with AOL's
reasonable requests to the extent AOL elects to implement any such access
restrictions.
- Contests. SmartBargains will take all steps necessary to ensure that any
contests, sweepstakes or similar promotions conducted or promoted through
the Customized Site (a "Contest") comply with all applicable federal,
state and local laws and regulations.
4. Disclaimers. Upon AOL's request, SmartBargains agrees to include within
the Customized Site a product disclaimer (the specific form and substance
to be mutually agreed upon by the Parties) indicating that all Content is
provided solely by SmartBargains and not AOL, and any transactions are
solely between SmartBargains and AOL Users purchasing CS Products from
SmartBargains and AOL is not responsible for any loss, expense or damage
arising out of the Content provided through the Customized Site.
5. AOL Look and Feel. SmartBargains acknowledges and agrees that AOL will own
all right, title and interest in and to AOL Look and Feel developed by or
for AOL, subject to SmartBargains's ownership rights in any SmartBargains
trademarks or copyrighted material within the Customized Site.
SmartBargains acknowledges that AOL owns all right, title, and interest in
and to the AOL Frame. Except for the AOL Look and Feel and AOL Frame as
provided above, and the AOL Trademarks or as otherwise specifically set
forth in this Agreement, SmartBargains shall have all right, title and
interest in and to the Customized Site.
6. Management of the Customized Site. SmartBargains will manage, review,
delete, edit, create, update and otherwise manage all Content available on
or through the Customized Site, in a timely and professional manner and in
accordance with the terms of this Agreement. SmartBargains will use its
commercially reasonable efforts to ensure that the Customized Site is
current, accurate and well-organized at all times. SmartBargains warrants
that the CS Products and other Licensed Content : (i) to its knowledge,
will not infringe on or violate any copyright, trademark, U.S. patent or
any other third party right, including without limitation, any music
performance or other music-related rights; (ii) will not violate AOL's
then-applicable Terms of Service for the AOL Service and any other AOL
property through which the Customized Site will be promoted or any other
standard, written AOL policy; and (iii) will not violate any applicable
law or regulation, including those relating to contests, sweepstakes or
similar promotions. Additionally, SmartBargains represents and warrants
that to its knowledge it owns or has a valid license to all rights to any
Licensed Content used in AOL "slideshow" or other formats embodying
elements such as graphics, animation and sound, free and clear of all
encumbrances and without violating the rights of any other person or
entity. SmartBargains also warrants that a reasonable basis exists for all
Product performance or comparison claims appearing through the Customized
Site. SmartBargains shall not in any manner, including, without limitation
in any Promotion, the Licensed Content or the Materials state or imply
that AOL recommends or endorses SmartBargains or SmartBargains's Products
(e.g., no statements that SmartBargains is an "official" or "preferred"
provider of products or services for AOL). AOL will have no obligations
with respect to the CS Products available on or through the Customized
Site, including, but not limited to, any duty to review or monitor any
such CS Products.
CONFIDENTIAL
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7. Duty to Inform. SmartBargains will promptly inform AOL of any information
related to the Customized Site which SmartBargains believes could
reasonably lead to a claim, demand, or liability of or against AOL and/or
its affiliates by any third party.
8. Production Work. In the event that SmartBargains requests AOL's production
assistance in connection with (i) ongoing programming and maintenance
related to the Customized Site, (ii) a redesign of or addition to the
Customized Site (e.g., a change to an existing screen format or
construction of a new custom form), (iii) production to modify work
performed by a third party provider or (iv) any other type of production
work, SmartBargains will work with AOL to develop a detailed production
plan for the requested production assistance (the "Production Plan").
Following receipt of the final Production Plan, AOL will notify
SmartBargains of (i) AOL's availability to perform the requested
production work, (ii) the proposed fee or fee structure for the requested
production and maintenance work and (iii) the estimated development
schedule for such work. To the extent the Parties reach agreement
regarding implementation of the agreed-upon Production Plan, such
agreement will be reflected in a separate work order signed by the
Parties. To the extent SmartBargains elects to retain a third party
provider to perform any such production work, work produced by such third
party provider must generally conform to AOL's standards & practices (as
provided on the America Online brand service at Keyword term
"styleguide"). The specific production resources which AOL allocates to
any production work by AOL to be performed on behalf of SmartBargains will
be as determined by AOL in its sole discretion. With respect to any
routine production, maintenance or related services which AOL reasonably
determines are necessary for AOL to perform in order to support the proper
functioning and integration of the Customized Site ("Routine Services"),
SmartBargains will pay the then-standard fees charged by AOL for such
Routine Services, so long as AOL provides reasonable advance notice of the
performance of such services, where feasible.
9. Overhead Accounts. To the extent AOL has granted SmartBargains any new
overhead accounts on the AOL Service pursuant to this Agreement,
SmartBargains will be responsible for the actions taken under or through
such overhead accounts, which actions are subject to AOL's applicable
Terms of Service and for any surcharges, including, without limitation,
all premium charges, transaction charges, and any applicable communication
surcharges incurred by any such overhead account issued to SmartBargains,
but SmartBargains will not be liable for charges incurred by any such
overhead account relating to AOL's standard monthly usage fees and
standard hourly charges, which charges AOL will bear. Upon the termination
of this Agreement, all such new overhead accounts, related screen names
and any associated usage credits or similar rights, will automatically
terminate. AOL will have no liability for loss of any data or content
related to the proper termination of any such new overhead account.
10. Merchant Certification Program. SmartBargains will participate in any
generally applicable "Certified Merchant" program operated by AOL or its
authorized agents or contractors. Such program may require merchant
participants on an ongoing basis to meet certain reasonable, generally
applicable standards relating to provision of electronic commerce through
the AOL Network (including, as a minimum, use of 40-bit SSL encryption and
if requested by AOL, 128-bit encryption) and may also require the payment
of certain reasonable certification fees to the applicable entity
operating the program. Each Certified Merchant in good standing will be
entitled to place on its affiliated Interactive Site an AOL designed and
approved button promoting the merchant's status as an AOL Certified
Merchant.
11. Search Terms. To the extent this Agreement sets forth any mechanism by
which the Customized Site will be promoted in connection with specified
search terms within any AOL product or service, SmartBargains hereby
represents and warrants that SmartBargains has all consents,
authorizations, approvals, licenses, permits or other rights necessary for
SmartBargains to use such specified search terms. Notwithstanding the
foregoing, AOL shall have the right to suspend the use of any search term
if AOL has reason to believe continued use may subject AOL to liability or
other adverse consequences.
12. Kids and Teens Content. SmartBargains shall notify AOL in writing whenever
it intends to distribute child designated content for the following age
groups on or through the Customized Site: (i) Kids (children ages 12 and
under), (ii) Young Teens (children ages 13-15), (iii) Mature Teens
(children ages 16-17). All Content appearing on or through the Customized
Site designated for the foregoing age groups shall comply at all time with
AOL's standard, written policies for such groups, which policies shall be
made available to SmartBargains upon request.
13. Expert/Specialist Content. If any of the Licensed Content professes to
provide expert, professional or other specialty advice or Content (such
as, without limitation, medical or psychological, religious, financial,
etc.), SmartBargains shall use its commercially reasonable efforts to
ensure that all such Licensed Content is prepared or reviewed by licensed,
insured and qualified practitioners/professionals in such field with
expertise on the particular topic and such Licensed
CONFIDENTIAL
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Content complies with applicable standards of the applicable profession
and all applicable laws and regulations. Upon request by AOL from time to
time, SmartBargains shall provide AOL with evidence reasonably
satisfactory to AOL of proper licensure and compliance with the foregoing
sentence.
14. Insurance. At all times during the Term, SmartBargains shall maintain an
insurance policy or policies adequate in amount (e.g., an amount at least
standard in SmartBargains's industry for a company of SmartBargains's
size) to insure SmartBargains against liability associated with the sale
of the SmartBargains Products and the offering of the Licensed Content.
SmartBargains shall include AOL as a named insured party on such policy or
policies. Upon AOL's request, SmartBargains shall provide AOL with a copy
of such policy or policies. SmartBargains shall promptly notify AOL of any
material change in such policy or policies.
CONFIDENTIAL
28
<PAGE>
EXHIBIT D
STANDARD LEGAL TERMS & CONDITIONS
1. Dispute Resolution.
1.1 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 promptly resolve the Dispute , the Dispute will be submitted to the
Management Committee for resolution. For ten (10) days following
submission of the Dispute to the Management Committee, the Management
Committee will have the exclusive right to resolve such Dispute; provided
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 (subject to the
proviso in the third sentence of this Section 1.1). "Management Committee"
will mean a committee made up of a senior executive from each of the
Parties for the purpose of resolving Disputes under this Section 1 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 1.1 and then, only in compliance with the procedures set forth in
the remainder of this Section 1.
1.2 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 1.1), any
Dispute not resolved by amicable resolution as set forth in Section 1.1
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.
1.3 Selection of Arbitrators. The arbitration panel will consist of three
arbitrators. Each Party will name an arbitrator within ten (10) 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) 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. If a
vacancy in the arbitration panel occurs after the hearings have commenced,
the remaining arbitrator or arbitrators may not continue with the hearing
and determination of the controversy, unless the Parties agree otherwise.
1.4 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.
1.5 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.
1.6 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
<PAGE>
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.
1.7 Non Arbitratable Disputes. Any Dispute that is not subject to final
resolution by the Management Committee or to arbitration under this
Section 1 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.
2.1 Promotional Materials. Each Party will submit to the other Party,
for its prior written approval, which will not be unreasonably
withheld or delayed, any marketing, advertising, or other
promotional materials (excluding Press Releases, which are governed
by Section 2.2 below) related to (but not consisting of) the
Customized Site and/or referencing the other Party and/or its trade
names, trademarks, and service marks (the "Promotional Materials");
provided, however, that either Party's use of screen shots of the
Customized Site for promotional purposes will not require the
approval of the other Party; and provided further, however, that,
following the initial public announcement of the business
relationship between the Parties in accordance with the approval and
other requirements contained herein, either Party's subsequent
factual reference to the existence of a business relationship
between the Parties in Promotional Materials, will not require the
approval of the other Party. Each Party will solicit and reasonably
consider the views of the other Party in designing and implementing
such Promotional Materials. Once approved, the Promotional Materials
may be used by a Party and its affiliates for the purpose of
promoting the Customized Site and the content contained therein and
reused for such purpose until such approval is withdrawn with
reasonable prior notice. In the event such approval is withdrawn,
existing inventories of Promotional Materials may be depleted.
2.2 Press Releases. Each Party shall submit to the other Party, for its
prior written approval, which shall not be unreasonably withheld or
delayed, any press release or similar public statement ("Press
Release") regarding the transactions contemplated hereunder,
provided that factual references by either party to the existence of
a business relationship between the Parties shall not require
approval of the other Party. 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 shall provide at least five (5) business days prior
written notice of such disclosure (unless a disclosure is required
by law to be made in a shorter period of time for causes outside the
control of the disclosing Party (e.g., other than because of the
disclosing Party's own delay), in which case the disclosing Party
shall provide written notice as far in advance of the disclosure as
is possible). 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 (it being understood that a retraction/clarification
distributed as widely through the same channels within forty eight
hours of the distribution of the initial unauthorized Press Release,
may be deemed a sufficient cure for such breach if such
retraction/clarification reasonably alleviates the harm to the
injured Party).
3. License. SmartBargains hereby grants AOL a non-exclusive worldwide
license to market, distribute, reproduce, display, perform, transmit and
promote the Licensed Content (or any portion thereof) through such areas
or features of the AOL Network as AOL deems appropriate and to sublicense
such rights to AOL's affiliates. SmartBargains acknowledges and agrees
that the foregoing license permits AOL to distribute portions of the
Licensed Content in synchronism or timed relation with visual displays
prepared by SmartBargains or AOL (e.g., as part of an AOL "slideshow"). In
addition, AOL Users will have the right to access and use the Customized
Site.
4. Trademark License. In designing and implementing the AOL Promos, the
Customized Site and the Promotional Materials, and subject to the other
provisions contained herein, SmartBargains will be entitled to use the
trade names, trademarks, and service marks of the AOL Properties; and AOL
and its affiliates will be entitled to use the trade names, trademarks,
and service marks of SmartBargains for which SmartBargains holds all
United States rights necessary for use in connection with this Agreement
(collectively, together with the AOL marks listed above, the "Marks");
provided that each Party: (i) does not create a unitary composite mark
involving a Mark of the other Party without the prior written approval of
such other Party; (ii) displays symbols and notices clearly and
sufficiently indicating the trademark status and ownership of the other
Party's Marks in accordance with applicable trademark law and practice;
and (iii) complies with all written guidelines provided to it by the other
Party related to use of the other Party's Marks.
5. Ownership of Trademarks. Each Party acknowledges the ownership right of
the other Party in the Marks of the other Party and agrees that all use of
the other Party's Marks will inure to the benefit, and be on behalf, of
the other Party. Each Party
<PAGE>
acknowledges that its utilization of the other Party's Marks will not
create in it, nor will it represent it has, any right, title, or interest
in or to such Marks other than the licenses expressly granted herein. Each
Party agrees not to do anything contesting or impairing the trademark
rights of the other Party.
6. Quality Standards. Each Party agrees that the nature and quality of its
products and services supplied in connection with the other Party's Marks
will conform to quality standards set by the other Party. Each Party
agrees to supply the other Party, upon request, with a reasonable number
of samples of any Materials publicly disseminated by such Party which
utilize the other Party's Marks. Each Party will comply with all
applicable laws, regulations, and customs and obtain any required
government approvals pertaining to use of the other Party's marks.
7. Infringement Proceedings. Each Party agrees to promptly notify the
other Party of any unauthorized use of the other Party's Marks of which it
has actual knowledge. Each Party will have the sole right and discretion
to bring proceedings alleging infringement of its Marks or unfair
competition related thereto; provided, however, that each Party agrees to
provide the other Party with its reasonable cooperation and assistance
with respect to any such infringement proceedings.
8. Representations and Warranties. Each Party represents and warrants to
the other Party that: (i) such Party has the full corporate right, power
and authority to enter into this Agreement and to perform the acts
required of it hereunder; (ii) the execution of this Agreement by such
Party, and the performance by such Party of its obligations and duties
hereunder, do not and will not violate any agreement to which such Party
is a party or by which it is otherwise bound; (iii) when executed and
delivered by such Party, this Agreement will constitute the legal, valid
and binding obligation of such Party, enforceable against such Party in
accordance with its terms; and (iv) such Party acknowledges that the other
Party makes no representations, warranties or agreements related to the
subject matter hereof that are not expressly provided for in this
Agreement. SmartBargains hereby represents and warrants that it possesses
all authorizations, approvals, consents, licenses, permits, certificates
or other rights and permissions necessary to sell the CS Products.
9. Confidentiality. Each Party acknowledges that Confidential Information
may be disclosed to the other Party during the course of this Agreement.
Each Party agrees that such Confidential Information will only be used by
it for the purposes permitted under this Agreement and that it will take
reasonable steps, at least substantially equivalent to the steps it takes
to protect its own proprietary information, during the term of this
Agreement, and for a period of three years following expiration or
termination of this Agreement, to prevent the duplication or disclosure of
Confidential Information of the other Party, other than by or to its
employees or agents. Notwithstanding the foregoing, either Party may issue
a press release or other disclosure containing Confidential Information
without the consent of the other Party, to the extent such disclosure is
required by law, rule, regulation or government or court order. In such
event, the disclosing Party will provide at least five (5) business days
prior written notice of such proposed disclosure to the other Party,
unless a disclosure is required by law to be made in a shorter period of
time for causes outside the control of the disclosing Party (e.g., other
than because of the disclosing Party's own delay), in which case the
disclosing Party shall provide written notice as far in advance of the
disclosure as is possible. Further, in the event such disclosure is
required of either Party under the laws, rules or regulations of the
Securities and Exchange Commission or any other applicable governing body,
such Party will (i) redact mutually agreed-upon portions of this Agreement
to the fullest extent permitted under applicable laws, rules and
regulations and (ii) submit a request to the SEC or such governing body
that such portions of this Agreement receive confidential treatment under
the laws, rules and regulations of the Securities and Exchange Commission
or otherwise be held in the strictest confidence to the fullest extent
permitted under the laws, rules or regulations of any other applicable
governing body.
10. Limitation of Liability; Disclaimer; Indemnification.
10.1 LIABILITY. UNDER NO CIRCUMSTANCES WILL EITHER PARTY BE LIABLE
TO THE OTHER PARTY FOR INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL
OR EXEMPLARY DAMAGES (EVEN IF THAT PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES), ARISING FROM BREACH OF THE AGREEMENT,
THE SALE OF CS PRODUCTS, THE USE OR INABILITY TO USE THE AOL
NETWORK, ANY AOL PROPERTY(IES), OR THE CUSTOMIZED SITE, OR ARISING
FROM ANY OTHER PROVISION OF THIS AGREEMENT, SUCH AS, BUT NOT LIMITED
TO, LOSS OF REVENUE OR ANTICIPATED PROFITS OR LOST BUSINESS
(COLLECTIVELY, "DISCLAIMED DAMAGES"); PROVIDED THAT EACH PARTY WILL
REMAIN LIABLE TO THE OTHER PARTY TO THE EXTENT ANY DISCLAIMED
DAMAGES ARE CLAIMED BY A THIRD PARTY AND ARE SUBJECT TO
INDEMNIFICATION PURSUANT TO SECTION 10.3. EXCEPT AS PROVIDED IN
SECTION 10.3, (I) LIABILITY ARISING UNDER THIS AGREEMENT WILL BE
LIMITED TO DIRECT, OBJECTIVELY MEASURABLE DAMAGES, AND (II) THE
MAXIMUM LIABILITY OF ONE PARTY TO THE OTHER PARTY FOR ANY CLAIMS
ARISING IN CONNECTION WITH THIS AGREEMENT WILL NOT EXCEED $[**].
<PAGE>
10.2 NO ADDITIONAL WARRANTIES. EXCEPT AS EXPRESSLY SET FORTH IN THIS
AGREEMENT, NEITHER PARTY MAKES ANY, AND EACH PARTY HEREBY
SPECIFICALLY DISCLAIMS ANY, REPRESENTATIONS OR WARRANTIES, EXPRESS
OR IMPLIED, REGARDING THE AOL NETWORK, THE AOL PROPERTIES OR THE
CUSTOMIZED SITE, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE AND IMPLIED WARRANTIES ARISING
FROM COURSE OF DEALING OR COURSE OF PERFORMANCE. WITHOUT LIMITING
THE GENERALITY OF THE FOREGOING, AOL AND SMARTBARGAINS EACH
SPECIFICALLY DISCLAIMS ANY WARRANTY REGARDING THE PROFITABILITY OF
THE CUSTOMIZED SITE.
10.3 Indemnity. Either Party will defend, indemnify, save and hold
harmless the other Party and the officers, directors, agents,
affiliates, distributors, franchisees and employees of the other
Party from any and all third party claims, demands, liabilities,
costs or expenses, including reasonable attorneys' fees
("Liabilities"), resulting from the indemnifying Party's material
breach or alleged material breach of any duty, representation, or
warranty of this Agreement.
10.4 Claims. If a Party entitled to indemnification hereunder (the
"Indemnified Party") becomes aware of any matter it believes is
indemnifiable hereunder involving any claim, action, suit,
investigation, arbitration or other proceeding against the
Indemnified Party by any third party (each an "Action"), the
Indemnified Party will give the other Party (the "Indemnifying
Party") prompt written notice of such Action. Such notice will (i)
provide the basis on which indemnification is being asserted and
(ii) be accompanied by copies of all relevant pleadings, demands,
and other papers related to the Action and in the possession of the
Indemnified Party. The Indemnifying Party will have a period of ten
(10) days after delivery of such notice to respond. If the
Indemnifying Party elects to defend the Action or does not respond
within the requisite ten (10) day period, the Indemnifying Party
will be obligated to defend the Action, at its own expense, and by
counsel reasonably satisfactory to the Indemnified Party. The
Indemnified Party will cooperate, at the expense of the Indemnifying
Party, with the Indemnifying Party and its counsel in the defense
and the Indemnified Party will have the right to participate fully,
at its own expense, in the defense of such Action. If the
Indemnifying Party responds within the required ten (10) day period
and elects not to defend such Action, the Indemnified Party will be
free, without prejudice to any of the Indemnified Party's rights
hereunder, to compromise or defend (and control the defense of) such
Action. In such case, the Indemnifying Party will cooperate, at its
own expense, with the Indemnified Party and its counsel in the
defense against such Action and the Indemnifying Party will have the
right to participate fully, at its own expense, in the defense of
such Action. Any compromise or settlement of an Action will require
the prior written consent of both Parties hereunder, such consent
not to be unreasonably withheld or delayed.
11. Acknowledgment. AOL and SmartBargains each acknowledges that the
provisions of this Agreement were negotiated to reflect an informed,
voluntary allocation between them of all risks (both known and
unknown) associated with the transactions contemplated hereunder.
The limitations and disclaimers related to warranties and liability
contained in this Agreement are intended to limit the circumstances
and extent of liability. The Parties agree that any principle of
construction or rule of law that provides that an agreement shall be
construed against the drafter of the agreement in the event of any
inconsistency or ambiguity in such agreement shall not apply to the
terms and conditions of this Agreement. The provisions of this
Section 11 will be enforceable independent of and severable from any
other enforceable or unenforceable provision of this Agreement.
12. Solicitation of AOL Users. During the term of the Agreement and for
a [**] period thereafter, SmartBargains will not use the AOL Network
(including, without limitation, the e-mail network contained
therein) to solicit AOL Users on behalf of another Interactive
Service. More generally, SmartBargains will not send unsolicited,
commercial e-mail (i.e., "spam") or other online communications
through or into AOL's products or services, absent a Prior Business
Relationship. For purposes of this Agreement, a "Prior Business
Relationship" will mean that the AOL User to whom commercial e-mail
or other online communication is being sent has voluntarily either
(i) engaged in a transaction with SmartBargains or (ii) provided
information to SmartBargains through a contest, registration, or
other communication, which included clear notice to the AOL User
that the information provided could result in commercial e-mail or
other online communication being sent to that AOL User by
SmartBargains or its agents. Any commercial e-mail or other online
communications to AOL Users which are otherwise permitted hereunder,
will (a) include a prominent and easy means to "opt-out" of
receiving any future commercial communications from SmartBargains,
and (b) shall also be subject to AOL's then-standard restrictions on
distribution of bulk e-mail (e.g., related to the time and manner in
which such e-mail can be distributed through or into the AOL product
or service in question).
13. AOL User Communications. To the extent that SmartBargains is
permitted to communicate with AOL Users under this Agreement
relating to the Customized Site or CS Products ordered through the
Customized Site, in any such communications to AOL Users on or off
the Customized Site (including, without limitation, e-mail
solicitations), SmartBargains will not encourage AOL Users to take
any action inconsistent with the scope and purpose of this
Agreement, including without limitation, the following actions: (i)
using an Interactive Site other than the Customized Site for the
purchase of CS Products, (ii) using Content other than the Licensed
Content; (iii) bookmarking of Interactive Sites; or (iv) changing
the default home page on the AOL
<PAGE>
browser. Additionally, with respect to such AOL User communications,
in the event that SmartBargains encourages an AOL User to purchase
CS Products through such communications, SmartBargains shall ensure
that (a) the AOL Network is promoted as the primary means through
which the AOL User can access the Customized Site and (b) any link
to the Customized Site will link to a page which indicates to the
AOL User that such user is in a site which is affiliated with the
AOL Network.
14. Collection and Use of User Information. SmartBargains shall use its
commercially reasonable efforts to ensure that its collection, use
and disclosure of information obtained from AOL Users under this
Agreement ("User Information") complies with (i) all applicable
United States laws and regulations and (ii) AOL's standard privacy
policies, available on the AOL Service at the keyword term "Privacy"
(or, in the case of the Customized Site, SmartBargains's standard
privacy policies so long as such policies are prominently published
on the site and provide adequate notice, disclosure and choice to
users regarding SmartBargains's collection, use and disclosure of
user information). SmartBargains will not disclose User Information
collected hereunder to any third party in a manner that identifies
AOL Users as end users of an AOL product or service or use User
Information collected under this Agreement to market another
Interactive Service to AOL Users.
15. Excuse. Neither Party will be liable for, or be considered in breach
of or default under this Agreement on account of, any delay or
failure to perform as required by this Agreement as a result of any
causes or conditions which are beyond such Party's reasonable
control and which such Party is unable to overcome by the exercise
of reasonable diligence.
16. Independent Contractors. The Parties to this Agreement are
independent contractors. Neither Party is an agent, representative
or employee of the other Party. Neither Party will have any right,
power or authority to enter into any agreement for or on behalf of,
or incur any obligation or liability of, or to otherwise bind, the
other Party. This Agreement will not be interpreted or construed to
create an association, agency, joint venture or partnership between
the Parties or to impose any liability attributable to such a
relationship upon either Party.
17. Notice. Any notice, approval, request, authorization, direction or
other communication under this Agreement will be given in writing
and will be deemed to have been delivered and given for all purposes
(i) on the delivery date if delivered by electronic mail on the AOL
Network (to screenname "AOLNotice@AOL.com" in the case of AOL) (with
confirmation in the form of a return receipt if possible) or by
confirmed facsimile; (ii) on the delivery date if delivered
personally to the Party to whom the same is directed (with
confirmation of delivery); (iii) one business day after deposit with
a commercial overnight carrier, with written verification of
receipt; or (iv) five business days after the mailing date, whether
or not actually received, if sent by U.S. mail, return receipt
requested, postage and charges prepaid, or any other means of rapid
mail delivery for which a receipt is available. In the case of AOL,
such notice will be provided to both the Senior Vice President for
Business Affairs (fax no. 703-265-1206) and the Deputy General
Counsel (fax no. 703-265-1105), each at the address of AOL set forth
in the first paragraph of this Agreement. In the case of
SmartBargains, such notice will be provided to the Chief Executive
Officer (fax no. 617-422-6212), at the address for SmartBargains set
forth in the first paragraph of this Agreement.
18. [Intentionally Blank]
19. No Waiver. The failure of either Party to insist upon or enforce
strict performance by the other Party of any provision of this
Agreement or to exercise any right under this Agreement will not be
construed as a waiver or relinquishment to any extent of such
Party's right to assert or rely upon any such provision or right in
that or any other instance; rather, the same will be and remain in
full force and effect.
20. Return of Information. Upon the expiration or termination of this
Agreement, each Party will, upon the written request of the other
Party, return or destroy (at the option of the Party receiving the
request) all confidential information, documents, manuals and other
materials specified by the other Party.
21. Survival. Sections ___________________[TBD] of the body of the
Agreement, Sections 8 through 31 of this Exhibit, and any payment
obligations accrued prior to termination or expiration, and any
other provision which, by its nature or express terms should survive
termination, will survive the completion, expiration, termination or
cancellation of this Agreement.
22. Entire Agreement. This Agreement sets forth the entire agreement and
supersedes any and all prior agreements of the Parties with respect
to the transactions set forth herein. Neither Party will be bound
by, and each Party specifically objects to, any term, condition or
other provision which is different from or in addition to the
provisions of this Agreement (whether or not it would materially
alter this Agreement) and which is proffered by the other Party in
any correspondence or other document, unless the Party to be bound
thereby specifically agrees to such provision in writing.
23. Amendment. No change, amendment or modification of any provision of
this Agreement will be valid unless set forth in a written
instrument signed by the Party subject to enforcement of such
amendment, and in the case of AOL, by an executive of at least Vice
President level.
<PAGE>
24. Further Assurances. Each Party will take such action (including, but
not limited to, the execution, acknowledgment and delivery of
documents) as may reasonably be requested by any other Party for the
implementation or continuing performance of this Agreement.
25. Assignment. SmartBargains will not assign this Agreement or any
right, interest or benefit under this Agreement without the prior
written consent of AOL (which consent may be withheld in AOL's sole
discretion); provided that, subject to AOL's right to terminate this
Agreement pursuant to Section 5.4 of the main body of the Agreement,
any assignment by way of merger or consolidation or a transfer of
substantially all of SmartBargains's assets, will not require such
prior written consent. Subject to the foregoing, this Agreement will
be fully binding upon, inure to the benefit of and be enforceable by
the Parties hereto and their respective successors and assigns.
26. Construction; Severability. In the event that any provision of this
Agreement conflicts with the law under which this Agreement is to be
construed or if any such provision is held invalid by a court with
jurisdiction over the Parties to this Agreement, (i) such provision
will be deemed to be restated to reflect as nearly as possible the
original intentions of the Parties in accordance with applicable
law, and (ii) the remaining terms, provisions, covenants and
restrictions of this Agreement will remain in full force and effect.
27. Remedies. Except where otherwise specified, the rights and remedies
granted to a Party under this Agreement are cumulative and in
addition to, and not in lieu of, any other rights or remedies which
the Party may possess at law or in equity; provided that, in
connection with any dispute hereunder, SmartBargains will be not
entitled to offset any amounts that it claims to be due and payable
from AOL against amounts otherwise payable by SmartBargains to AOL.
28. Applicable Law. Except as otherwise expressly provided herein, this
Agreement will be interpreted, construed and enforced in all
respects in accordance with the laws of the Commonwealth of Virginia
except for its conflicts of laws principles.
29. Export Controls. Both Parties will adhere to all applicable laws,
regulations and rules relating to the export of technical data and
will not export or re-export any technical data, any products
received from the other Party or the direct product of such
technical data to any proscribed country listed in such applicable
laws, regulations and rules unless properly authorized.
30. Headings. The captions and headings used in this Agreement are
inserted for convenience only and will not affect the meaning or
interpretation of this Agreement.
31. Counterparts; Facsimile. This Agreement may be executed in
counterparts, each of which will be deemed an original and all of
which together will constitute one and the same document. This
Agreement, and written amendments hereto, may be executed by
facsimile.
<PAGE>
EXHIBIT E
AOL LAUNCH OBLIGATIONS
Task Duration Expected Start Date Finish
------------------- --------- ------------------ ------
Wireframes Approved [**]
[**] [**]
[**] [**]
[**] [**]
[**] [**]
[**] [**]
[**] [**]
[**] [**]
[**] [**]
[**] [**]
[**] [**]
[**] [**]
[**] 2 Days [**] [**]
[**] 2 Days [**] [**]
[**] 7 Days [**]
[**] 1 Day [**] [**]
[**] [**]
[**] 1 Day [**] [**]
[**] 2 Days [**] [**]
[**] 1 Day [**] [**]
[**] 1 Day [**] [**]
[**] 0 Days [**]
<PAGE>
EXHIBIT F
BBB GUIDELINES
[TO BE PROVIDED]