Co-Branding Agreement - Brander Favorable

COOLEY GODWARD LLP
FORM CO-BRANDING AGREEMENT
(BRANDER-FAVORABLE)

This form agreement is designed to be used when representing a website who is requesting website service provider to build a co-branded version of its services. This form is very brander-favorable and contains many terms that are objectionable to providers. This form was developed in conjunction with a mass-market portal that routinely uses third party service providers to provide service to the portal’s users (and usually charges the service provider for the privilege).

Among the core issues to consider when using this form:

Section 2.1: this paragraph is used to permit the brander to accelerate revenue recognition by treating the associated deliverables as a development obligation for which a development fee is paid.
Section 2.2: the brander will want to be very explicit about exactly what aspects of the service will be co-branded. It is common now for the service to include web pages, Java scripts, emails automatically sent to users, etc. All branding opportunities should be thought through.
Section 2.2 and Exhibit C: The “Automatic Partner Registration” procedure is a reasonably specific implementation and thus may not be standard. However, generally portals are requiring users to log in only through the portal, at which point the portal passes the data to the provider.
Section 2.3: by its operation, Section 2.3 contemplates that eventually the co-branded service could have different functionality than the provider’s standard functionality. Because this would require the provider to have 2 different code bases, many providers will not be willing to do this.
Section 2.4 and Exhibit B: this section contemplates that the provider will agree to service levels that, as contemplated by Exhibit B, are quite onerous. Many providers balk at paying for the privilege of agreeing to service levels. However, in many cases the parties can come up with a suite of remedies that are fair if the provider is not operating at a minimum level of service.
Section 2.6: this section contemplates that the provider is delivering news-style information on a regular schedule that will be used as a teaser to pull users to the co-branded pages. In many cases the brander will be relatively harsh about the consequences of the provider failing to deliver information on a timely basis, since the brander may not be able to achieve its promotional metrics if it is trying to drive users to the co-branded pages with old content.
Section 3: this section assumes that the brander has the better ad sales force and thus will always control ad sales. For a more flexible approach, see the provider-favorable form.
Section 3.3: notice that the provider banners link to the co-branded pages. Usually the provider is paying to run these banners. Thus, the provider is paying to promote the co-branded pages and not necessarily the provider itself. Often providers will want promotion for themselves (instead of the co-branded pages) and will want any banners they pay for to drive users to a provider-branded version of the service.
Section 5: while generally both the provider- and brander-favorable forms take a relatively permissive view towards each party’s use of user data, this section adds some extra restrictions on provider’s use of user data. This is because the provider is getting access to extra information through the automatic partner registration procedure, and thus the brander wants to be extra-protective of this information.
Section 6.2: this section is interesting because the Internet Tax Freedom Act should bar most taxes that might be applicable to the relationship. However, a few states have ambiguous statutes on the books that may subject Internet advertising to sales taxes, and thus this provision allocates those possible tax consequences. It also allocates any future taxes if the prohibition on sales taxes is not permanent.
Sections 8.2-8.4: these sections contemplate a number of ways the brander can easily exit the agreement. Depending on the upfront payments or advances made by the provider, providers’ reaction to these termination clauses can range from annoyance to outrage.
Section 12.1: this clause is usually the source of endless confusion. Frequently the provider will try to make this clause mutual, although in 90% or more of the situations related to the agreement the provider solely controls whether or not both parties are in compliance with applicable laws. Occasionally the brander is engaged in certain types of promotion that are legally complex (e.g., sweepstakes), so in those cases there may need to be carefully drafted delineations of each party’s compliance obligations. However, it is rarely appropriate merely to make the clause mutual without extra thought.
Exhibit B, Sections I and J. These clauses are both pretty egregious and are often modified or negotiated out altogether. However, if the standards are subject to force majeure, then usually they become toothless. Further, without a clause like Section J, Section 8.2 applies and the provider will get 15 days to cure a material breach—and in some cases it does not make sense to give an extra 15 days or to even contemplate that a breach can be cured except by not doing it again. From the brander’s perspective, then, at minimum there needs to be some notion that a repeat breach of the same clause triggers termination.

This form was last updated on October 3, 1999 by Eric Goldman.

CO-BRANDING AGREEMENT

This Co-Branding Agreement (the “Agreement”) is entered into as of __________, 1999 (the “Effective Date”) by and between ___________, with its principal place of business at __________ (“Brander”), and _______________________, with its principal place of business at _______________________ (“Provider”).

1. Definitions.

a. “Brander Marks” means all Brander domain names, trademarks and logos reasonably necessary or desirable for Provider to perform under this Agreement.

b. “Brander Site” means all pages under Brander.com domain or otherwise operated by Brander or any company it controls, is controlled by or that is under common control.

c. “Co-Branded Pages” means all pages of the Service (including, without limitation, any Java screens associated with the Service or emails or other direct communications sent to Users or others by operation of the Service).

d. “Domain Name” means the domain name described in Exhibit A.

e. “Launch Date” means the first date on which the Service is made publicly available.

f. “Marks” means the Provider Marks or Brander Marks, as applicable.

g. “Page Templates” means Brander’s standard page layout templates, as revised by Brander from time to time.

h. “Provider Banners” means any banner, button, text or similar ads Provider provides to Brander in connection with this Agreement.

i. “Provider Content” means any content or information (including without limitation any text, music, sound, photographs, video, graphics, data or software), in any medium, provided by Provider to Brander (other than Provider Banners), as part of the Service or on the Co-Branded Pages, including without limitation any content specified in Exhibit A.

j. “Provider Marks” means all Provider domain names, trademarks and logos reasonably necessary or desirable for Brander to perform under this Agreement.

k. “Provider Site” means the Provider-branded (i.e., non-co-branded) version of the Service and associated pages.

l. “Service” means the services described in Exhibit A, as changed over time in accordance with this Agreement, which are co-branded using the Page Templates. The Service also includes any Provider-operated back-end administration tools or pages used by Brander or Provider to exchange data in accordance with this Agreement.

m. “Shadow Site” means the password-protected site where the Co-Branded Pages are made available for Brander’s review and approval prior to being made publicly available.

n. “User” means any person who accesses any Co-Branded Page.

2. Development and Implementation.

2.1 Pre-Launch Deliverables. Promptly following the Effective Date, Brander shall deliver to Provider the Page Templates and the other materials specified in Exhibit A.

2.2 Co-Branded Page Development. Provider shall develop the Co-Branded Pages using the Page Templates and take all other steps required to co-brand the Service in accordance with Exhibit A. In addition, if Brander is passing any user data to Provider, Brander’s standard Automatic Partner Registration procedure shall apply, and Provider shall perform the development necessary to use such procedure. The current procedure is described in Exhibit C. Provider shall make the Service implementation available to Brander on the Shadow Site prior to making it publicly available. Provider shall not make the initial Service implementation publicly available without Brander’s prior written approval. Unless otherwise specified, each party shall be responsible for all development, hosting and other costs associated with the pages living on their servers and all emails they send.

2.3 Changes. Brander shall have sole control over the Service’s look and feel, and Provider shall not make any change in the Service’s look and feel without Brander’s prior consent. Further, Provider shall notify Brander if Provider changes or adds any functionality of the services described in Exhibit A (as modified by Provider over time) as implemented on the Provider Site. Unless requested by Brander, Provider shall implement such changes or additions to the Service and make such implementation available on the Shadow Site for Brander’s approval within 30 days of their introduction on the Provider Site. Under no circumstances shall Provider offer Users any community features (such as email, chat, message boards, or the ability to create home pages) from the Co-Branded Pages without Brander’s approval. Provider shall make available via the Shadow Site all changes to the Service or the Co-Branded Pages contemplated in this Section 2, and Provider shall not implement such changes on the publicly available Service or Co-Branded Pages until it has received Brander’s approval.

2.4 Service Operation. Provider shall host and operate, in accordance with the terms of Exhibit B, the Service under the Domain Name.

2.5 Rebranding. If requested by Brander, Provider shall implement on the Co-Branded Pages new versions of the Page Templates if Brander changes the Page Templates across Brander Site generally. Further, if requested by Brander, Provider shall create additional branded versions of the Service and Co-Branded Pages branded with the branding of Brander’s distribution partners, which branded versions shall be implemented within 30 days and subject to approval in accordance with this Section 2.

2.6 Provider Content. Provider shall provide Provider Content to Users via the Co-Branded Pages, and Provider shall deliver to Brander those elements of Provider Content residing on Brander’s servers in accordance with the terms of Exhibit A. Unless otherwise directed by Brander, the Co-Branded Pages shall include all of the content displayed on the Provider Site, and the Provider Content shall be updated to keep the Co-Branded Pages in parity with the Provider Site. Any nonconformance with the terms of the frequency/quantity columns of Exhibit A, even if the nonconformance was beyond Provider’s control, shall permit Brander to terminate immediately if the breach is not cured within 12 hours.

2.7 Navigation. Provider shall not, in conjunction with the Service, use any interstitials, pop-up windows, other intermediate steps or any other technology or content which acts as a barrier to the transition of a User from Brander Site to the Co-Branded Pages, nor shall Provider otherwise frame the Co-Branded Pages or use any other technology which interferes with or affects the page layout of such pages. All Co-Branded Pages shall link back to Brander Site as specified by Brander.

2.8 User Relations. Provider shall be responsible for providing all customer support regarding the Service or the Co-Branded Pages, and Brander may redirect to Provider any associated customer support inquiries. Provider shall have sole control over the user agreement that governs the Service but shall consider Brander’s input, and Provider shall have the sole responsibility for dealing with breaches of such user agreement. If Brander has an issue with the user agreement or Provider’s enforcement of it, the parties shall discuss such issues in good faith. Furthermore, Provider’s privacy policy shall make any disclosures, or obtain any User consent, necessary to make the disclosures about Users back to Brander required by this Agreement. All Users shall be treated at least as favorably in all respects (including without limitation with respect to pricing, quality of service, and customer support responsiveness) as Provider treats users of the Provider Site.

2.9 Database Synchronization. If requested by Brander and if Provider captures relevant information, Provider shall use reasonable efforts to cooperate with Brander to implement ways for Brander to obtain such User information to the extent that such information would change the relevant information in Brander’s databases.

2.10 Promotions. The parties shall conduct the promotions specified in Exhibit A.

3. Advertising.

3.1 Ad Sales. Brander shall have sole control over all advertising and promotion inventory on the Co-Branded Pages (including without limitation any paid placement on such pages). Provider shall not introduce any advertising spots or third party branding in conjunction with the Co-Branded Pages or the Service without Brander’s approval. If, after Brander (or its designee) uses commercially reasonable efforts to sell such inventory, there remains unsold inventory, then Brander may, in its sole discretion, place house or barter ads in such inventory.

3.2 Ad Serving. Brander or its designee shall be solely responsible for serving all advertisements and promotions in connection with the Co-Branded Pages. Brander shall provide Provider with ad serving code, which Provider shall implement at its own expense on all Co-Branded Pages. Brander hereby grants to Provider a nonexclusive license to use such code solely to permit Brander or its designee to serve ads in connection with the Co-Branded Pages. Provider shall notify Brander at least 15 days prior to making any changes that would affect serving ads on the Co-Branded Pages.

3.3 Provider Banners. Provider shall deliver to Brander any Provider Banners which are to be run in accordance with this Agreement. Such banners shall comply with Brander’s then-current technical standards. The terms of any insertion order or similar document regarding the Provider Banners are expressly rejected, except to the extent that they specify the location, timing or duration of the display of the Provider Banners and such terms are accepted by Brander. Unless mutually agreed otherwise, Provider Banners shall link to the Co-Branded Pages. Brander may request that Provider Banners be co-branded with Brander Marks, in which case the parties shall work together to develop a mutually acceptable implementation. Brander may approve or reject any Provider Banner in its sole discretion.

4. Licenses and Standards.

4.1 Content. Provider hereby grants to Brander a non-exclusive, worldwide license to use, reproduce, distribute, create derivative works of (only as necessary to build pages in a manner consistent with this Agreement), publicly display, publicly perform and digitally perform Provider Banners, and those elements of the Provider Content served from Brander’s servers (as denoted in Exhibit A), on Brander Site or otherwise as reasonably appropriate to advertise and promote the Service and the Co-Branded Pages. Subject to the approval process in Section 2, Brander hereby grants to Provider a non-exclusive, worldwide license to use, reproduce, distribute, create derivative works of (only as necessary to build Co-Branded Pages), publicly display, publicly perform and digitally perform the Page Templates on Co-Branded Pages.

4.2 Trademarks. Provider hereby grants to Brander a non-exclusive, worldwide license to use the Provider Marks (including the Domain Name if applicable) to advertise and promote the Service. Brander hereby grants to Provider a non-exclusive, worldwide license to use Brander Marks (including the Domain Name if applicable) on the Co-Branded Pages and, if requested by Brander, in the Provider Banners.

4.3 Trademark Restrictions. The Mark owner may terminate the foregoing trademark license if, in its reasonable discretion, the licensee’s use of the Marks tarnishes, blurs or dilutes the quality associated with the Marks or the associated goodwill and such problem is not cured within 10 days of notice of breach; alternatively, instead of terminating the license in total, the owner may specify that certain licensee uses may not contain the Marks. Title to and ownership of the owner’s Marks shall remain with the owner. The licensee shall use the Marks exactly in the form provided and in conformance with any trademark usage policies. The licensee shall not take any action inconsistent with the owner’s ownership of the Marks, and any benefits accruing from use of such Marks shall automatically vest in the owner. The licensee shall not form any combination marks with the other party’s Marks other than the Domain Name (if applicable). If the Domain Name is deemed a combination mark, neither party shall use the Domain Name for any purpose except as expressly provided herein or attempt to register the Domain Name with any government office, and the parties will jointly cooperate on any enforcement action of infringement of the Domain Name.

4.4 Ownership. As between Brander and Provider: (a) Brander and its suppliers retain all rights, title and interest in and to all intellectual property rights embodied in or associated with the Page Templates, and (b) Provider and its suppliers retain all rights, title and interest in and to all intellectual property rights embodied in or associated with the Provider Content and Provider Banners. There are no implied licenses under this Agreement, and any rights not expressly granted to a licensee hereunder are reserved by the licensor or its suppliers. Neither party shall exceed the scope of the licenses granted hereunder.

4.5 Standards. Provider shall not provide Provider Banners (excluding any Brander Marks incorporated therein at Brander’s request) or Provider Content, and Brander shall not provide to Provider any Page Templates, that: (a) infringe any third party’s intellectual property or privacy/publicity right; (b) violate any law or regulation; (c) are defamatory, obscene, harmful to minors or child pornographic; (d) contain any viruses, trojan horses, worms, time bombs, cancelbots or other computer programming routines that are intended to damage, detrimentally interfere with, surreptitiously intercept or expropriate any system, data or personal information; or (e) are materially false, inaccurate or misleading.

5. User Data. Except as specified in this section, each party may freely use and disclose any information (both individual and aggregated) about Users (“User Data”). Neither party shall disclose any User Data in any manner that permits the User Data to be associated with the other party or permits the targeting of Users on the basis of their status as Users (in Brander’s case) or Brander users (in Provider’s case), nor shall a party use the User Data to target Users on the basis of their status as Users (in Brander’s case) or Brander users (in Provider’s case). If Brander is passing any User Data to Provider through the Automatic Partner Registration procedure, Provider agrees not to disclose such User Data to any third party and agrees not to send unsolicited email messages to such Users. However, either party may disclose User Data if it is aggregated (in a non-associatable way) with data from multiple online properties. Each party shall use and disclose User Data only in accordance with the privacy policy under which it was collected.

6. Payment Terms.

6.1 Payments. The parties shall make the payments described in Exhibit A. Overdue payments shall accrue interest, at the lesser of 1½% per month or the maximum allowable interest under applicable law, from due date until paid, and the owing party shall pay the owed party’s costs of collection (including reasonable attorneys’ fees).

6.2 Taxes. All fees and payments stated herein exclude, and the party making payment shall pay, any sales, use or other tax related to the parties’ performance of their obligations or exercise of their rights under this Agreement, exclusive of taxes based on the receiving party’s net income.

6.3 Audit Rights. A party obligated to make payments hereunder shall keep for 3 years proper records and books of account relating to the computation of such payments. Once every 12 months, the party receiving payment or its designee may inspect such records to verify reports. Any such inspection will be conducted in a manner that does not unreasonably interfere with the inspected party’s business activities. The inspected party shall immediately make any overdue payments disclosed by the audit plus applicable interest. Such inspection shall be at the inspecting party’s expense; however, if the audit reveals overdue payments in excess of 5% of the payments owed to date, the inspected party shall immediately pay the cost of such audit, and the inspecting party may conduct another audit during the same 12 month period.

7. Reports.

7.1 By Brander. Within 30 days following the end of each month, Brander shall provide Provider with its standard reports regarding Brander’s promotions hereunder and, if applicable, reports regarding the computation of the fees it owes under Section 6.

7.2 By Provider. Provider shall provide to Brander the following reports: (a) daily usage reports regarding the Co-Branded Pages describing the number of page impressions, number of Users and such other information as Provider generally provides to its other similar partners, (b) weekly demographic reports regarding the Service containing summary information regarding user demographic profiles, and (c) if applicable, within 30 days following the end of each month, reports regarding the computation of the fees it owes under Section 6.

8. Term and Termination.

8.1 Term. This Agreement will become effective on the Effective Date and will continue in effect for _____ years following the Launch Date.

8.2 Termination for Failure to Perform. By providing written notice, a party may immediately terminate this Agreement: (a) if the other party materially breaches this Agreement and fails to cure that breach within 15 days after receiving written notice of the breach, or (b) as provided in Sections 2.6 or 12.7 or Exhibit B. In addition, by providing written notice, Brander may immediately terminate this Agreement, or at its option immediately suspend its promotion and other efforts hereunder, in the case of Provider’s breach of Section 12.1.

8.3 Termination for Failure to Launch. By providing written notice, Brander may terminate this Agreement in its sole discretion if the Launch Date does not occur within 60 days of the Effective Date (which time period shall be extended one day for each day of delay attributable solely to Brander’s failure to perform).

8.4 Termination for Changes. By providing written notice, Brander may terminate this Agreement in its sole discretion if Provider’s business model changes such that the Service is no longer Provider’s primary line of business.

8.5 Effects of Termination. Upon expiration or termination, all licenses granted hereunder shall terminate unless such licenses are expressly stated as surviving. Provider shall promptly remove all Brander Marks and Page Templates from its servers, and Brander shall promptly remove all Provider Marks, Provider Banners and Provider Content from its servers. Sections 1, 4.4, 5, 6.2, 6.3, 8.5, 9, 10, 11 and 12.2 to 12.9, and any obligation to pay any owed but unpaid amounts, shall survive any expiration or termination.

9. No Warranties. EACH PARTY PROVIDES ALL MATERIALS AND SERVICES TO THE OTHER PARTY “AS IS.” EACH PARTY DISCLAIMS ALL WARRANTIES AND CONDITIONS, EXPRESS, IMPLIED OR STATUTORY, INCLUDING WITHOUT LIMITATION THE IMPLIED WARRANTIES OF TITLE, NON-INFRINGEMENT, MERCHANTABILITY, AND FITNESS FOR A PARTICULAR PURPOSE. Each party acknowledges that it has not entered into this Agreement in reliance upon any warranty or representation except those specifically set forth herein. Unless an approval process is specified herein, all deliverables provided by one party to the other shall be deemed accepted (for purposes of the UCC) when delivered.

10. Indemnity. Each party (the “Indemnifying Party”) shall indemnify the other party (the “Indemnified Party”) against any and all claims, losses, costs and expenses, including reasonable attorneys’ fees, which the Indemnified Party may incur as a result of claims in any form by third parties arising from: (x) the Indemnifying Party’s acts, omissions or misrepresentations to the extent that the Indemnifying Party is deemed an agent of the Indemnified Party, or (y) the Indemnifying Party’s breach of its privacy policy. In addition, Brander shall indemnify Provider against any and all claims, losses, costs and expenses, including reasonable attorneys’ fees, which Provider may incur as a result of claims in any form by third parties arising from the Page Templates or Brander Marks. In addition, Provider shall indemnify Brander against any and all claims, losses, costs and expenses, including reasonable attorneys’ fees, which Brander may incur as a result of claims in any form by third parties arising from Provider Banners (excluding Brander Marks if applicable), Provider Content, Provider Marks, the Service (excluding the Page Templates or Brander Marks) or Provider’s breach of Section 12.1. The foregoing obligations are conditioned on the Indemnified Party: (i) giving the Indemnifying Party notice of the relevant claim, (ii) cooperating with the Indemnifying Party, at the Indemnifying Party’s expense, in the defense of such claim, and (iii) giving the Indemnifying Party the right to control the defense and settlement of any such claim, except that the Indemnifying Party shall not enter into any settlement that affects the Indemnified Party’s rights or interest without the Indemnified Party’s prior written approval. The Indemnified Party shall have the right to participate in the defense at its expense.

11. Liability Limits. NEITHER PARTY SHALL BE LIABLE FOR LOST PROFITS OR SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT (HOWEVER ARISING, INCLUDING NEGLIGENCE), EVEN IF THE PARTIES ARE AWARE OF THE POSSIBILITY OF SUCH DAMAGES.
EXCEPT IN THE EVENT OF A CLAIM UNDER SECTION 10 OR FAILURE TO PAY UNDER SECTION 6, IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY IN AN AMOUNT GREATER THAN THE AMOUNT PROVIDER ACTUALLY PAYS TO BRANDER HEREUNDER.

12. General.

12.1 Compliance with Laws. At its own expense, Provider shall comply with all applicable laws and regulations regarding providing and operating the Service.

12.2 Governing Law. This Agreement will be governed and construed in accordance with the laws of the State of California without giving effect to conflict of laws principles. Both parties submit to personal jurisdiction in California and further agree that any cause of action arising under this Agreement shall be brought in a court in Santa Clara County, CA.

12.3 Publicity. Neither party shall issue any press release or similar publicity statement regarding this Agreement without the prior approval of both parties (not to be unreasonably withheld) or as required by law.

12.4 Independent Contractors. The parties are independent contractors, and no agency, partnership, franchise, joint venture or employment relationship is intended or created by this Agreement. Neither party shall make any warranties or representations on behalf of the other party.

12.5 Assignment. Neither party may assign its rights or delegate its duties hereunder (except to an affiliated company, or to a successor in interest in the event of a merger, sale of assets of the business to which this Agreement is related, or consolidation) without the other party’s prior written consent, and any purported attempt to do so is null and void.

12.6 Severability; Headings. If any provision herein is held to be invalid or unenforceable for any reason, the remaining provisions will continue in full force without being impaired or invalidated in any way. The parties agree to replace any invalid provision with a valid provision that most closely approximates the intent and economic effect of the invalid provision. Headings are for reference purposes only and in no way define, limit, construe or describe the scope or extent of such section.

12.7 Force Majeure. Except as otherwise provided, if performance hereunder (other than payment) is interfered with by any condition beyond a party’s reasonable control, the affected party shall be excused from such performance to the extent of such condition. However, if a force majeure detrimentally affects a party’s performance of a material covenant hereunder for 14 days or more, the other party can terminate this Agreement. Each party acknowledges that website operations may be affected by numerous factors outside of a party’s control.

12.8 Notice. Any notice under this Agreement will be in writing and delivered by personal delivery, overnight courier, confirmed facsimile, confirmed email, or certified or registered mail, return receipt requested, and will be deemed given upon personal delivery, 1 day after deposit with an overnight courier, 5 days after deposit in the mail, or upon confirmation of receipt of facsimile or email. Notices will be sent to a party at its address set forth above or such other address as that party may specify in writing pursuant to this Section.

12.9 Entire Agreement; Waiver. This Agreement sets forth the entire understanding and agreement of the parties, and supersedes any and all oral or written agreements or understandings between the parties, as to the subject matter of the Agreement. This Agreement may be changed only by a writing signed by both parties. The waiver of a breach of any provision of this Agreement will not operate or be interpreted as a waiver of any other or subsequent breach.

Brander Provider:

By:                                     By:
Name:                                Name:
Title:                                   Title:

Exhibit A

Business Terms

Description of the Service:

Description of Provider Content:

Description of Provider Content	Host Server for Each Element of Content	Quantity Provided of Such Content	Frequency of Updates of Such Content

All Provider Content delivered to Brander shall be delivered in the following format and via the following protocol (DESCRIBE): _____________________.

Domain Name for the Co-Branded Pages: [provider.brander.com]

Brander Pre-Launch Deliverables: In addition to developing the Page Templates, Brander shall provide to Provider a media and promotional plan and a plan for doing the production/design services related to the Service’s integration into Brander Site.

Brander’s Promotions: [Describe]

Notwithstanding anything to the contrary herein, if Brander promises to deliver a minimum number of impressions or other promotions during a specified time period and fails to do so, Brander’s sole and exclusive obligation in such circumstance shall be to continue performing the promotion until it delivers the total number of required impressions.

Brander may redesign or modify the organization, structure or “look and feel” of Brander Site at any time without notice. In the event such modifications affect the placement of such promotions, Brander shall notify Provider and shall work with Provider to display such promotions in comparable places on Brander Site.

Provider’s Promotions: [Describe]

Payments:

Development Fee. On the Effective Date, Provider shall pay to Brander a nonrefundable one-time development fee of $_______ for Brander’s preparation and delivery of the pre-launch deliverables.
Placement Fee. On the Launch Date and each monthly anniversary thereof, Provider shall pay to Brander a nonrefundable monthly placement fee of $_______, paid in advance for the following month.
Bounties. On or prior to each monthly anniversary of the Launch Date, Provider shall pay to Brander $____ per User who registers with the Service.
Transaction Split. Provider shall pay Brander ___% of Net Transactional Revenue. “Net Transactional Revenues” is defined as all gross consideration actually received by Provider (including without limitation any shipping, handling or transaction fees) from Users for goods and services offered from the Co-Branded Pages, less: (a) sales taxes actually collected, (b) actual postage expenses, and (c) refunds actually given to Users. Provider shall not use any techniques on the Co-Branded Pages or in conjunction with the Service to drive Users to venues where their purchases would be outside the scope of Net Transactional Revenue.
Ad Split. Brander shall pay Provider ___% of Net Advertising Revenues. “Net Advertising Revenues” means all monetary consideration Brander actually receives for CPM-based advertisements and promotions (other than those for its commerce partners) delivered in connection with the Co-Branded Pages, less any sales or other taxes collected in conjunction with such ads and promotions and a sales and administration fee of 15%.

Exhibit B

Performance Standards

A. Service Availability. The Service shall be publicly available to Users a minimum of 90% of the time during any 24 hour period, 95% of the time during any 7 day period, and 98% of the time during any 30 day period; and there will be no period of interruption in such public accessibility that exceeds 1 continuous hour.

B. Response Time. The mean response time for server response to access the Service shall not exceed more than 6 seconds during any 1 hour period.

C. Bandwidth. The bandwidth representing the Service servers’ connection to the Internet shall be operating at peak capacity no more than 10 minutes in any 24 hour period and at greater than 50% of peak capacity no more than 60 minutes of any 24 hour period.

D. Security. Provider shall prevent unauthorized access to restricted areas of its servers and any databases or other sensitive material generated from or used in conjunction with the Service. In addition, Provider shall immediately notify Brander of any known security breaches or holes in the Service or Co-Branded Pages.

E. Error Correction. Provider shall resolve any errors with the Service (including without limitation any Javascripts or ActiveX controls used in connection with such pages) that cause such services not to be able to perform one or more major functions within 24 hours of the earlier of its discovery of the error or Brander’s notice of the error. Provider shall resolve all other errors with such services within 7 days of the earlier of its discovery of the error or Brander’s notice of the error.

F. Browser Compatibility. The Service shall initially be compatible with Netscape Navigator 3.X and 4.X and Microsoft Internet Explorer 3.X and 4.X. Brander may unilaterally add additional browsers or versions that the Service must be compatible with, effective after 30 days advance written notice, if Brander certifies that it believes such additional browsers or versions are used by more than 5% of its Users. Users shall not require any plug-ins in order to access any Service functionality.

G. Data Authentication. Provider shall use commercially reasonable efforts, no less than industry-standard, to authenticate the origin of all information provided by Brander as having come from Brander.

H. Customer Support. Provider shall auto-respond to all customer and technical support inquiries from Users within 10 minutes of the receipt of inquiry. Provider shall manually respond to all such inquiries within 24 hours. Provider shall resolve all such inquiries within 72 hours or shall notify Brander that it cannot do so, in which case Brander at its sole discretion may intervene to assist in resolving the inquiry.

I. Inapplicability of Force Majeure. The terms of this exhibit apply regardless of the cause of the nonconformance, even if the nonconformance was beyond the control of Provider, unless the failure to perform is attributable solely to Brander’s failure to perform its obligations under this Agreement or the failure arises due to a factor that affects the Internet throughout the United States.

J. Remedies. In addition to other applicable remedies, Brander may immediately terminate this Agreement without a further cure period if: (a) any breach of this Exhibit lasts 2 consecutive specified time periods, or if no time period for measurement is specified, 10 days, (b) the same provision is breached on two separate occasions (even if the first was cured), or (c) there are 2 incidents that cause independent breaches of separate provisions (even if cured) within any 6 month period.

Exhibit C

Automatic Partner Registration

To maintain a consistent user experience, any Brander member should not need to separately log in to the Service or the Co-Branded Pages. The only login or registration that should be required to access the Service or the Co-Branded Pages is Brander Site’s login or registration. Because Provider hosts the Service and the Co-Branded Pages, Brander will pass to Provider information about each User accessing the Service or the Co-Branded Pages as described below:

Accounts will be created for each User via a one-time “welcome” page (hosted by Brander) when the User tries to access the portion of the Service requiring such registration for the first time.

The “welcome” page will include registration fields for any information about the User needed to use the Service but not currently in Brander’s database.

The “welcome” page will include a “Privacy Policy” informing the User that their data is being passed to a third party (Provider) in order to use the Services.

Any additional required User information is collected and entered into Brander’s database. Then, the required User information is sent to Provider all at once to create the new account. Brander will include the User’s “username” and “UserID#” in the data passed to Provider.

Additional notes on account creation:

The User will only see the “Welcome” page until they consent to the privacy policy and enter any required information. This page will not appear after the User completes the initial account creation process.

Account information stored on Provider’s servers in connection to the Service will need to be kept in parity with Brander. To do so, the parties shall work together to implement a mechanism for updating information on Provider’s servers when User information changes on Brander Site.

The technology used to pass the data to Provider for account creation and ongoing account updates will be determined jointly by Provider and Brander.

The UserID# Brander passes to Provider during account creation will be stored by Provider in association with each User. This UserID# is necessary to link individual user reporting and individual account updates between Provider and Brander on an ongoing basis.

Co-Branding Agreement — Brander Favorable