Advertising And Promotion Agreement - 2/26/99

CONFIDENTIAL


EXECUTION COPY


WATCH MERCHANT PROGRAM
ADVERTISING AND PROMOTION AGREEMENT


This Advertising and Promotion Agreement (this "Agreement") is entered into as of February 26, 1999 (the "Effective Date") between YAHOO! INC., a California corporation with offices at 3420 Central Expressway, Santa Clara, CA 95051 ("Yahoo") and NEWWATCH COMPANY, a Texas corporation with offices at 3355 West Alabama - Suite 175, Houston, Texas 77098 ("Newwatch").


In consideration of the mutual promises contained in this Agreement, Yahoo and Newwatch hereby agree as follows:


SECTION 1: DEFINITIONS.


The following terms are used in this Agreement with the respective meanings set forth below:


1.1 "Category Pages" shall mean those Pages identified as such on
Exhibit A.


1.2 "Click-through" shall mean a user's "pressing" or "clicking" on any
Newwatch Link as measured by Yahoo's advertiser reporting system.


1.3 "Launch Date" shall mean the date on which Yahoo first activates a
Newwatch Link.


1.4 "Newwatch Banner" shall mean an advertising promotion substantially
similar in form as that set forth on Exhibit B and which meets the
following criteria: (a) promotes the on-line sale of Watch Products,
(b) has dimensions no larger than 468 pixels wide by 60 pixels high,
(c) is in .GIF, .GIF89A or .JPEG format, (d) does not have "looped"
animation, (e) does not have any animation longer than six (6)
seconds, (f) has a file size no greater than 12K, and (f) will permit
users to navigate directly to a page relating to Watch Products on
the Newwatch Site. Yahoo may modify these specifications at its
discretion.


1.5 "Newwatch Button" shall mean a link substantially similar in form as
that set forth on Exhibit B that: (a) contains a Newwatch logo and
has dimensions no larger than 88 pixels wide by 31 pixels high, (b)
does not contain animation, (c) has a file size no greater than 2K,
(d) will permit users to navigate directly to a Page on the Newwatch
Site relating to the online sale of Watch Products, (e) contain
alternative text of no more than ten (10) characters when placed on
a Yahoo Directory Page or sixteen (16) characters when placed on a
Yahoo Keyword Page and (f) contain three text links if the Newwatch
Button is on Yahoo Directory Pages or one text link if the Newwatch
Button is on a Yahoo Keyword Pages of no more than 16 characters.
Yahoo may modify these specifications at its discretion.


1.6 "Newwatch Front Page Promotion" shall mean a promotion substantially
similar in form as that set forth on Exhibit B that: (a) has
dimensions no larger than 230 pixels wide by 33 pixels high and
promotes Watch Products, (b) has no animation longer than six
seconds, (c) does not have "looped" animation, and (d) has a file
size no greater than 3K.


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In addition, the Newwatch Front Page Promotion shall comply with
Yahoo's current front-page promotion guidelines attached as Exhibit
D, which may be modified by Yahoo at its discretion.


1.7 "Newwatch Link" shall mean any link placed by Yahoo under this
Agreement, including, without limitation, the Newwatch Banner,
Newwatch Shopping Banner, Newwatch Button, Newwatch Mail Button,
Newwatch Shopping Module and Newwatch Front Page Promotion.


1.8 "Newwatch Mail Button" shall mean a link substantially similar in
form as that set forth on Exhibit B that: (a) On the "welcome pages":
(i) contains a Newwatch logo with dimensions no Larger than 88 pixels
wide by 31 pixels high and has no animation, (ii) promotes Watch
Products, (iii) has a text message of not more than 50 characters (2
lines of not more than 25 characters each) below the button; (b) In
the email sent to users: (i) all pages will be emailed by Yahoo, (ii)
the same message will be sent to all users, (iii) the email may
contain text and graphics not to exceed 30K total; and (c) on the
"log out" pages: (i) contains a Newwatch logo with dimensions no
larger than 88 pixels wide by 31 pixels high and has no animation;
(ii) includes an HTML drop-down box with up to 10 items, 25
characters maximum per line; (iii) includes a text message of not
more than 25 characters describing the drop-down box content. Yahoo
may modify these specifications at its discretion.


1.9 "Newwatch Site" shall mean the web site owned by Newwatch currently
located at http://www.newwatch.com.


1.10 "Newwatch Shopping Module" shall mean a promotion substantially
similar in form as that set forth on Exhibit B that: (a) has
dimensions no larger than 150 pixels wide by 275 pixels high, (b)
visually promotes a Watch Product for sale in Newwatch's Yahoo Store
that is not a special offer or promotion, (c) contains text with the
name of the product (and nothing else) that does not exceed fifty
(50) characters, (d) does not contain animation, (e) is in JPEG or
GIF format, (e) has a file size no greater than 20K, (f) contains an
optional Newwatch logo which shall be no greater than ten percent
(10%) of the image space in the Module, (g) will permit users to
navigate directly to a Page in the Newwatch Store relating to the
Watch Product promoted in the module and (h) specifies the price of
the product being sold. Yahoo may modify these specifications at its
discretion.


1.11 "Newwatch Store" shall mean an online store created with Yahoo Store
technology and located in the Yahoo Store.


1.12 "Page" means any World Wide Web page (or, for online media other than
Web sites, the equivalent unit of the relevant protocol).


1.13 "Page View" shall mean a user's request for a Page as measured by
Yahoo's advertiser reporting system.


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1.14 "Page View Obligations" shall be Yahoo's obligations to put Newwatch
links on its pages as set forth in Sections 5.1 and 5.2 of this
Agreement.


1.15 "Run of Network" shall mean banners rotating throughout the Yahoo
Properties.


1.16 "Search Results Pages" shall mean those Pages identified as such on
Exhibit A.


1.17 "Watch Merchant" shall mean any company or other entity engaged in
the online sale of Watch Products.


1.18 "Watch Merchant Program" shall mean Yahoo's program consisting of
certain marketing, advertising and promotional activities with Watch
Merchants.


1.19 "Watch Products" shall mean timepieces meant to be worn or carried,
as well as associated accessories such as replacement batteries or
watchbands.


1.20 "Term" shall mean the period beginning on the Launch Date and
continuing for a period of twelve (12) months.


1.21 "Yahoo Mail Pages" shall mean those Pages identified as such on
Exhibit A.


1.22 "Yahoo Main Site" shall mean Yahoo's principal U.S. based directory to
the World Wide Web currently located at http://www.yahoo.com.


1.23 "Yahoo Properties" shall mean any Yahoo branded or co-branded media
properties, including, without limitation, Internet guides, that are
developed in whole or in part by Yahoo or its affiliates.


1.24 "Yahoo Shopping Pages" shall mean those Pages identified as such on
Exhibit A.


1.25 "Yahoo Store" shall mean that Yahoo branded property containing
various online stores and currently located at http://store.yahoo.com.


SECTION 2: LINKS TO NEWWATCH.


2.1 Newwatch Banner. Yahoo shall provide the Newwatch Banner on the
Category Pages designated on Exhibit A and on pages associated with
the keywords specified on Exhibit A on a rotating basis until its
Page View Obligations are met.


2.2 Newwatch Button. Yahoo shall provide the Newwatch Button on the
Category Pages and Search Results Pages designated in Exhibit A,
during the Term. Each Newwatch Button and associated text links shall
promote Watch Products and permit users to navigate directly to a
Page on the Newwatch Site relating to the Watch Products relevant to
the Category Page or Search Results Page on which such Button and
text link appears.


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2.3 Newwatch Mail Button. Yahoo shall provide the Newwatch Mail Button
on the Yahoo Mail Pages on a rotating basis until its Page View
Obligations are met.


2.4 Newwatch Shopping Module. Yahoo shall provide the Newwatch Shopping
Module in the Apparel/Accessories area within Yahoo Shopping on a
rotating basis until its Page View Obligations are met.


2.5 Newwatch Front Page Promotion. Yahoo shall provide the Newwatch Front
Page Promotion on a rotating basis until its Page View obligations
are met, on the home page of the Yahoo Main Site, currently located
at http://www.yahoo.com in connection with the following four
"multi-sponsored" promotions: (i) Mother's Day 1999, (ii) Father's
Day 1999, (iii) Holiday Extravaganza 1999 and (iv) Valentine's Day
2000.


2.6 Newwatch Store. Newwatch agrees to open an online store at Yahoo
Store and to abide by the specifications, terms and conditions of the
Yahoo Store program as further detailed at http://store.yahoo.com.


2.7 Limited Exclusivity. Yahoo shall not include merchant buttons
promoting or pointing directly to pages selling Watch Products on the
Yahoo pages containing a Newwatch Button. This restriction applies to
buttons only and Yahoo is in no way restricted from (a) displaying
any non-button advertising on the pages containing a Newwatch Button
or (b) providing links to other merchants as a part of Yahoo's search
or editorial directory on a Yahoo page containing a Newwatch Button.


3 IMPLEMENTATION.


3.1 Subject to the provisions of this Agreement, Yahoo will be solely
responsible for the user interface and placement of the Newwatch Links
and Newwatch shall be solely responsible for and shall provide
Yahoo with all artwork and design elements of the Newwatch Links.


3.2 Newwatch shall promptly provide Yahoo all URLs, URL formats (as appli-
cable), content, and other materials necessary for Yahoo to provide
the Newwatch Links. All content and material contained in the
Newwatch Links are subject to Yahoo's approval and must comply with
all applicable federal, state and local laws, rules and regulations,
including, without limitation, consumer protection laws and rules and
regulations governing product claims, truth in labeling, and false
advertising.


3.3 Newwatch hereby grants to Yahoo a non-exclusive, worldwide, fully
paid license to use, reproduce and display Newwatch's trade names,
trademarks, service names, other proprietary marks and any other
intellectual property provided by Newwatch to Yahoo, as is reasonably
necessary to perform its obligations under this Agreement.


3.4 In no event shall any Page on the Newwatch Site to which users
Click-through from any Newwatch Link, contain graphic or textual
hyperlinks, banner advertisements or promotions of any navigational
guides or other online services similar to Yahoo including, but not
limited to: Amazon, America Online, CNET/Snap, Disney, eBay,


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Excite, Infoseek/Go Network, Lycos, Microsoft, Netscape, and their
successors.


3.5 Newwatch shall place a Yahoo graphic or text link on all Pages of the
Newwatch Site to which users Click-through from any Newwatch Link.
Such Yahoo graphic or text link shall (a) be placed in a manner
approved by Yahoo, (b) contain the Yahoo name and/or logo as provided
by Yahoo and (c) directly link the user back to a Page on the Yahoo
Properties designated by Yahoo.


3.6 The Newwatch Site shall comply with the scale, speed and performance
requirements mutually agreed upon by the parties but in no event
shall be less than that provided by the Yahoo Main Site.


4 RIGHT OF FIRST PRESENTATION.


4.1 Within thirty (30) days prior to the expiration of the Term, Yahoo
will provide written notice to Newwatch in the event that Yahoo, at
its sole discretion, elects to extend this Watch Merchant Program.
Yahoo shall describe Yahoo's reasonable business requirements for the
extension in its written notice to Newwatch. The parties will use
good-faith efforts to negotiate and execute a written extension to
this Agreement under reasonable terms and conditions. If Newwatch
declines to com ...