MEDIA COMMITMENT AND CONTRIBUTION AGREEMENT (this "AGREEMENT"), dated
as of July 27, 2000, is made by and between USA Networks, Inc., a Delaware
corporation ("USAI"), and Styleclick, Inc., a Delaware corporation (the
"COMPANY").
WHEREAS, ▇▇▇▇▇▇▇▇▇▇.▇▇▇ Inc., a California corporation ("OLD
STYLECLICK"), Internet Shopping Network LLC, a Delaware limited liability
company ("ISN"), and USANi Sub LLC, a Delaware limited liability company ("USANI
SUB"), have entered into an Amended and Restated Agreement and Plan of Merger,
dated as of March 23, 2000 (the "MERGER AGREEMENT"), which provides for, among
other things, the simultaneous mergers of Old Styleclick and ISN with separate
wholly owned subsidiaries of the Company;
WHEREAS, each of ISN and USANi Sub are indirect subsidiaries of USAi;
WHEREAS, the Merger Agreement sets forth as a condition precedent to
Old Styleclick's obligations thereunder that the Company shall have entered into
this Agreement with USAi to provide Media Value (as defined below) to the
Company; and
WHEREAS, the parties now desire to carry out the intent and purpose of
the Merger Agreement by, among other things, the parties' execution and delivery
of this instrument evidencing USAi's obligation to provide Media Value on the
terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein contained, the parties hereto hereby agree as follows:
1. DEFINITIONS. Capitalized terms used herein and not otherwise defined
shall have the respective meanings ascribed thereto in Exhibit A.
2. MEDIA COMMITMENT. On the terms and subject to the conditions of this
Agreement, USAi hereby agrees to contribute to the Company, on the terms set
forth in Exhibit A, $10 million of Media Value (the "USAI CONTRIBUTION").
3. ISSUANCE OF COMMON STOCK. On the terms and subject to the conditions
of this Agreement, the Company hereby agrees to issue, as consideration for
USAi's execution of this Agreement, 538,721 shares of Class B Common Stock, par
value $0.01, of the Company (the "SHARES").
4. REPRESENTATIONS AND WARRANTIES.
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(a) REPRESENTATIONS AND WARRANTIES OF EACH PARTY. Each party
hereto represents and warrants to each other party hereto that (i) it has the
right and power to enter into and fully perform this Agreement and to make the
commitments it makes herein and to perform fully its obligations hereunder; (ii)
it has obtained (or in the case of future commitments, will have obtained by the
time such commitment is fulfilled) all necessary licenses, permissions and
consents required to execute this Agreement and to provide the Media Value to
the Company in accordance with the terms of this Agreement or as otherwise
necessary in connection with any of the transactions contemplated hereby.
(b) REPRESENTATIONS AND WARRANTIES OF USAI. USAi hereby
represents and warrants to the Company as follows:
(i) USAi or its representative has had access to the
same kind of information concerning the Company that is required by Schedule A
of the Securities Act of 1933, as amended (the "ACT"), to the extent that the
Company possesses such information.
(ii) USAi has such knowledge and experience in
financial and business matters that it is capable of utilizing the information
that is available to it concerning the Company to evaluate the risks of an
investment in the Company.
(iii) USAi has been advised that the Shares being
subscribed for hereunder have not been registered under the Act and,
accordingly, that USAi may not be able to sell or otherwise dispose of such
shares when it wishes to do so.
(iv) The Shares being subscribed for hereunder are
being purchased by USAi for its own benefit and account for investment and not
with a view to, or for resale in connection with, a public offering or
distribution thereof.
(v) It has been informed that (i) the Shares being
subscribed for hereunder may not be resold without registration thereof under
the Act (unless an exemption from such registration is available) or in
violation of any law; (ii) the certificate or certificates representing the
Shares may be impressed with a legend indicating that the Shares are not
registered under the Act and reciting that transfer thereof is restricted; and
(iii) stop transfer instructions in respect of the Shares may be issued to any
transfer agent, transfer clerk or other agent at any time acting for the
Company.
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5. FURTHER ASSURANCES. From time to time, as and when requested by any
party, each party shall execute and deliver, or cause to be executed and
delivered, all such documents and instruments and shall take, or cause to be
taken, all such further or other actions, as such other party may reasonably
deem necessary or desirable to consummate the transactions contemplated by this
Agreement.
6. INDEMNIFICATION. The Company hereby agrees to indemnify, defend and
hold harmless USAi and its Affiliates (other than the Company or any of its
subsidiaries) and their respective employees, officers, directors,
representatives and agents (each such party, a "USAI PARTY"), from and against
any and all claims, damages, liabilities, costs and expenses (including legal
expenses and reasonable counsel fees) brought against a USAi Party arising from
a claim that any Content provided by the Company for use, transmission and/or
distribution by USAi under the terms of this Agreement (i) infringes in any
manner any copyright, patent, trademark, trade secret or any other intellectual
property right of any third party, (ii) violates any law or regulation, or (iii)
otherwise violates any rights of any person or entity, including, without
limitation, rights of publicity, privacy or personality, or has otherwise
resulted in any consumer fraud, product liability, tort, breach of contract,
injury, damage or harm of any kind to any third party; PROVIDED, HOWEVER, that
in any such case: (i) USAi shall provide the Company with prompt notice of any
such claim and (ii) USAi shall permit the Company to assume and control the
defense of such action upon the Company's written notice to USAi of its
intention to so indemnify, so long as the Company does not enter into any
settlement or compromise of any such claim without USAi's prior written consent.
The Company will reimburse each USAi Party on demand for any payment made at any
time after the date hereof in respect of any liability or claim in respect of
which an USAi Party is entitled to be indemnified hereunder.
7. TERMINATION. This Agreement shall terminate on the earlier of (i)
the date on which all Media Value required to be provided under this Agreement
has been provided, and (ii) the end of the Term. Notwithstanding the foregoing,
the provisions of Section 6 of this Agreement shall remain in full force and
effect following termination of this Agreement.
8. NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed given when delivered personally, upon a receipt of a
transmittal confirmation if sent by facsimile or like transmission, and on the
next Business Day when sent by Federal Express, Express Mail or similar
overnight courier service to the parties at the following addresses or facsimile
numbers (or at such other address or facsimile number for a party as shall be
specified by like notice):
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(vi) If to the Company, to:
Styleclick, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
(vii) If to USAi, to:
USA Networks, Inc.
Carnegie Hall Tower
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
9. WAIVERS AND AMENDMENTS. This Agreement may be amended, superseded,
canceled, renewed or extended, and the terms hereof may be waived, only by
written instruments signed by the parties to this Agreement, or in the case of a
waiver, by the party waiving compliance. Except where a specific period for
action or inaction is provided herein, no delay on the part of a party in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof. Neither any waiver on the part of a party of any such right, power or
privilege, nor any single or partial exercise of any such right, power or
privilege, shall preclude any further exercise thereof or the exercise of any
other such right, power or privilege.
10. ASSIGNMENT. Neither this Agreement nor any of the rights, interests
or obligations hereunder shall be assigned by either of the parties hereto
(whether by operation of law or otherwise) without the prior written consent of
the other parties; PROVIDED, HOWEVER, that each party shall be permitted to
assign its rights and obligations under this Agreement to any controlled
Affiliate. Subject to the preceding sentence, this Agreement will be binding
upon, inure to the benefit of and be enforceable by the parties and their
respective successors and permitted assigns.
11. SEVERABILITY OF PROVISIONS. The provisions of this Agreement shall
be deemed severable and the invalidity or unenforceability of any provision
shall not affect the validity or enforceability or the other provisions of this
Agreement. If any provision of this Agreement, or the application of that
provision to any person or any circumstance, is invalid or unenforceable, (a) a
suitable and equitable provision shall be substituted for that provision in
order to carry out, so far as may be valid and enforceable, the intent and
purpose of the invalid or unenforceable provision and (b) the remainder of this
Agreement and the application of the provision to other
5
persons or circumstances shall not be affected by such invalidity or
unenforceability, nor shall such invalidity or unenforceability affect the
validity or enforceability of the provision, or the application of that
provision, in any other jurisdiction.
12. ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES. This Agreement, the
Merger Agreement and the other documents contemplated hereby and thereby (a)
constitute the entire agreement, and supersede all prior agreements and
understandings, both written and oral, between the parties with respect to the
subject matter hereof, and (b) are not intended to confer upon any person or
entity, other than the parties hereto or thereto, any rights or remedies
hereunder or thereunder.
13. GOVERNING LAW. This Agreement shall be governed and construed in
accordance with the laws of the State of New York applicable to agreements made
and to be performed entirely within such state.
14. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be an original and all of which, when taken
together, shall constitute one and the same instrument.
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[Signature Page for Media Commitment and Contribution Agreement]
IN WITNESS WHEREOF, USAi and the Company have duly executed this
Agreement as of the date first written above.
USA NETWORKS, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
Title: Executive Vice President,
Operations and Strategic Planning
STYLECLICK, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
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EXHIBIT A
USAI CONTRIBUTION TERMS
1. DEFINITIONS.
"AFFILIATE" means, with respect to any Person, any other Person that
directly or indirectly controls, is controlled by, or is under common
control with, such first Person. The term "control" means possession,
directly or indirectly, of the power to direct or cause the direction
of the management or policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
"CONTENT" shall mean any text, graphics, video or film intended by the
Company to be distributed, transmitted or publicly exhibited by USAi
through the USA Network.
"FAIR MARKET VALUE" shall mean, with respect to any advertising time
provided pursuant to this Agreement, the rate charged by USAi to
comparable third parties for comparable advertising time on the media
property on which such advertising time is placed, taking into account
all attendant circumstances that may affect such rate and any discounts
thereto.
"MEDIA VALUE" shall mean advertising time on the USAi Network computed
on a net basis at Fair Market Value.
"PERSON" means any individual, corporation, partnership, firm, joint
venture, association, trust, limited liability company, unincorporated
organization, estate, trust or other entity.
"TERM" shall mean the period beginning on the date hereof and ending on
the third anniversary of the date hereof.
"USAI NETWORK" shall mean the group of media properties owned, directly
or indirectly, by USAi, whether now owned or hereafter acquired and
including, without limitation, USA Network, SciFi Channel, USA
Broadcasting, Ticketmaster, Home Shopping Network, ▇▇▇-▇▇.▇▇▇,
▇▇▇▇▇▇▇▇▇▇.▇▇▇, ▇▇▇▇▇▇▇▇▇▇.▇▇▇, ▇▇▇▇▇▇▇▇.▇▇▇, ▇▇▇▇▇▇▇▇▇▇.▇▇▇ and Hotel
Reservations Network, Studios USA nationally syndicated programming.
2. TERMS AND CONDITIONS
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USAi shall provide the Media Value upon the written request of the
Company and shall, to the extent reasonably practicable and in
accordance with such request, provide the Media Value in equal annual
amounts over the Term; PROVIDED that, USAi shall not be obligated to
provide more than 50% of the Media Value to be provided under this
Agreement in any one calendar year. Any portion of the Media Value that
is not provided during the Term shall be deemed forfeited by the
Company.
The Company shall be responsible for providing all content used in the
advertising time and for insuring that the use of such content complies
with all applicable laws; PROVIDED, that, USAi shall, to the extent
reasonably practical, use such content in a manner consistent with
instructions provided by the Company and shall obtain the consent of
the Company prior to materially altering such content.
The Company shall pay any and all fees due a third party for USAi's use
of the Content in accordance with the terms of this Agreement,
including, without limitation, any copyright use fees or union
payments. The Company shall indemnify USAi for all expenses and/or
damages incurred by USAi in connection with any claim brought against
USAi in connection with any such use of the Content.
Upon Company's reasonable request, USAi shall advise Company of
advertising opportunities on the USAi Network; PROVIDED that USAi shall
have no obligation to act as a consultant to the Company with regard to
its purchases of advertising time. Company shall have the right at any
time, but in accordance with normal industry advertising media planning
customs and providing customary lead time for review, to request
specific media placements on the USAi Network. USAi shall use its
reasonable best efforts to place such media to the satisfaction of
Company; PROVIDED, HOWEVER, that USAi will determine, in its sole
discretion, the actual placement of all commercial advertising time
purchased, based on, among other things, available inventory.
Notwithstanding anything to the contrary, USAi shall not be obligated
to make a requested media placement if: (a) conflicting obligations
existing at the time of such request preclude such media placement; or
(b) if such placement is, in USAi's reasonable opinion, injurious of
USAi's interests. To the extent that Company has used less than 50% of
the Media Value allocated to it under the terms of this Agreement by
the commencement of the third year of the Term due to non-placement by
USAi under the preceding sentences, the Company shall have the right to
exceed the 50% limit during the third year of the Term (in accordance
with the above procedure). To the extent that Company has not used 100%
of the Media Value allocated thereto hereunder by the end of the Term
due to non-placement by USAi under the preceding sentences, then the
Term shall be extended until all such Media Value is used (in
accordance with
9
the above procedure) with Company being obligated to use its best
efforts to place such media as quickly as possible so as to minimize
the extension of the Term.
