ELECTRONIC COMMERCE REFERRAL AND REVENUE SHARING AGREEMENT

EXHIBIT 10.16



ELECTRONIC COMMERCE REFERRAL AND

REVENUE SHARING AGREEMENT



This Electronic Commerce Referral And Revenue Sharing Agreement (the "Agreement") is made as of this 24th Day of August, 1998 (the "Effective Date")

--------- -------------- by and between INTELISYS ELECTRONIC COMMERCE LLC ("Intelisys") and RoweCom,

--------- ("RoweCom") (Intelisys and RoweCom each a "Party" and, collectively, the

------- ----- "Parties").

-------



WHEREAS, Intelisys is engaged in the business of providing software (the "Intelisys Software") and services ("Intelisys Services") to entities

------------------ ------------------ ("Intelisys Licensees") engaged in the business of buying and selling goods and

------------------- services via the Internet;



WHEREAS, RoweCom is engaged in the business of providing business-to- business electronic commerce services to businesses and not-for-profit institutions interested in purchasing subscriptions, books and other knowledge products and services of a professional nature (the "Knowledge Products") and,

------------------ in connection therewith, RoweCom collaborates with such entities to enhance existing intranet networks to enable such entities to purchase the Knowledge Products via their intranets (the "RoweCom Services"); and

----------------



NOW, THEREFORE, for and in consideration of the agreements of the Parties set forth below, Intelisys and RoweCom agree as follows:





ARTICLE 1. OBLIGATIONS OF THE PARTIES - ---------- --------------------------



1.01 Intelisys Referrals. Within 30 days after the Effective Date and from

------------------- time to time during the term of this Agreement, Intelisys shall provide RoweCom Literature to Qualified Intelisys Licensees. "Qualified Intelisys Licensee"

---------------------------- means any Intelisys customer that, to the knowledge of Intelisys, has or may have a need or desire to purchase Knowledge Products and could use RoweCom Services in order to enhance their use of Intelisys Software to purchase such Knowledge Products; provided that Intelisys customers that are already RoweCom

------------- customers at the time of the referral shall not be considered Qualified Intelisys Licensees. "RoweCom Literature" means brochures, specifications, sales

------- ---------- materials and form contracts provided by RoweCom.



1.02 RoweCom Referrals. Within 30 days after the Effective Date and from time

----------------- to time during the term of this Agreement, RoweCom shall provide Intelisys Literature to Qualified RoweCom Licensees. "Qualified RoweCom Licensee" means

-------------------------- any RoweCom customer that, to the knowledge of RoweCom, could use Intelisys Software or Intelisys Services in order to enhance their use of RoweCom Services; provided that RoweCom customers that are already Intelisys customers at the time of the referral shall not be considered Qualified RoweCom Licensees. "Intelisys Literature" means brochures, specifications, sales materials and form

-------------------- contracts provided by Intelisys.



1.03 Implementation Plan. As soon as is practicable, but no later than ninety

------------------- (90) days after the Effective Date:



(a) Intelisys agrees to (i) list RoweCom as a partner on its web site and, as it deems appropriate, in its advertising and promotional materials; (ii) provide, as part of the Intelisys Software and Intelisys Services, a hyperlink to the web site or web sites designated by RoweCom; (iii) advise Intelisys Licensees that RoweCom is the preferred provider of Knowledge Products for the Intelisys Services and list RoweCom as the default supplier for Knowledge Products in Intelisys Licensees' directories; (iv) train its sales force regarding the features and benefits of the Knowledge Products and the RoweCom Services, and represent the Knowledge Products and the RoweCom Services to Intelisys' clients and prospects as Intelisys deems appropriate; and (v) facilitate introductions and accompany RoweCom sales people on sales calls to Intelisys customers as Intelisys deems appropriate.



(b) RoweCom agrees to (i) list Intelisys as a partner on its web site and, as RoweCom deems appropriate, in its advertising and promotional materials; and (ii) provide a hyperlink on such web site to the web site or web sites designated by Intelisys; and (iii) to train its sales force regarding the features and benefits of the Intelisys Services, and represent the Intelisys Services to RoweCom's clients and prospects as RoweCom deems appropriate; and (iv) facilitate introductions and accompany Intelisys sales people on sales calls to RoweCom customers as RoweCom deems appropriate.



Any purchases of Knowledge Products made by Qualified Intelisys Licensees through RoweCom hyperlinks installed in Intelisys Software, Intelisys Services or Intelisys' web site will qualify for revenue sharing, as described in Section 2.01. Any Qualified RoweCom Licensee referral generated by the RoweCom direct sales force will be eligible for revenue sharing as described in Section 2.01 (a referral from the sales force must include the company name, contact name and phone number).



1.04 Promotional and Advertising Materials. Each party shall submit to the

------------------------------------- other for its written approval all advertising and promotional copy prepared by or on behalf of either party pursuant to Section 1.03 hereof, via overnight delivery not less than ten (10) days prior to release for use or distribution. Any submission in response to which the reviewing party shall have delivered notice of disapproval to the submitting party within such ten (10) day period shall be deemed disapproved, and the submitting party shall not release such materials for use or distribution but shall be permitted to resubmit such samples and/or advertising and promotional materials for approval as necessary



1.05 Service Agreements. RoweCom and Intelisys shall use their best efforts to

------------------ commence negotiations with and enter into an agreement to provide their respective Services to each of their respective Licensees that requests those services.



1.06 Development Plan. Intelisys agrees to provide to RoweCom, a description

---------------- of how the Intelisys system integrates with suppliers and a description of the workflow, along with all documentation necessary for RoweCom to become compliant with the Intelisys Services. As soon as practicable, but no later than ninety (90) days after the Effective Date, the parties agree to develop a formula for metering web site click-through traffic for the purposes of determining Revenue Sharing Fees (as defined herein) and such formula shall be initialed by both parties and attached hereto as Exhibit C and shall form part of this Agreement.

------- -



1.07 Software License. Intelisys grants to RoweCom, at no extra charge and

---------------- subject to the terms set forth in the Intelisys Software License Agreement attached hereto as Exhibit A, a non-exclusive, royalty-free right and license to

------- - use the Intelisys tool kit software (the "Tool Kit Software"), for the purpose of modifying the RoweCom Services as required to make such services compliant with the



Intelisys Services. RoweCom will be responsible for its own development costs in implementing links to the Intelisys Services but may request assistance from Intelisys if, in RoweCom's reasonable judgment, such assistance is required. Intelisys shall not charge RoweCom for such assistance but shall be reimbursed for out of pocket expenses incurred in delivering such assistance.





ARTICLE 2. REVENUE SHARING AND PAYMENTS - ---------- ----------------------------



2.01 Revenue Sharing.

---------------



(a) RoweCom shall pay to Intelisys, revenue sharing fees in accordance with

Section 2.03 (the "Revenue Sharing Fees") in respect of purchases and

--------------------

licenses of products from, and on-line access or transaction charges for,

services provided by RoweCom that are placed by Qualified Intelisys

Licensees pursuant to RoweCom customer agreements.



(b) Intelisys shall pay to RoweCom, Revenue Sharing Fees in respect of

purchases and license of products from, and on-line access or transaction

charges for services provided by, Intelisys that are placed by Qualified

RoweCom Licensees pursuant to Intelisys customer agreements.



2.02 Quarterly Statements. Within 15 days after the end of each calendar

-------------------- quarter after the Effective Date and for as long as any amounts are due in accordance with this Article, each Party shall submit to the other a detailed statement ("Quarterly Statement") that sets forth:

-------------------



(1) In the case of RoweCom as reporting party, each Qualified Intelisys

Licensee that executes a RoweCom customer agreement and, in the case of

Intelisys as reporting party, each Qualified RoweCom Licensee that signs

an Intelisys customer agreement (in each case, a "Customer Agreement");



(2) The payments received by such Party during such quarter under all of its

Customer Agreements, irrespective of whether such Customer Agreements were

executed during such quarter.

2.03 Payment. During the Initial Term and any Renewal Term:

-------



(1) RoweCom shall pay Intelisys, upon delivery of each Quarterly Statement, a

Revenue Sharing Fee equal to ***/1/ shown on the Quarterly Statement

delivered by Intelisys. The Fee Revenue used for calculating such payments

shall be determined as set forth on Exhibit B.

------- -



(2) Intelisys shall pay RoweCom, upon delivery of each Quarterly Statement, a

Revenue Sharing Fee equal to ***/2/ shown on the Quarterly Statement

delivered by RoweCom. The Fee Revenue used for calculating such payments

shall be determined as set forth on Exhibit B.

------- -



- -------------------- /1/ Confidential treatment has been requested for this potion of this exhibit.

A complete copy of this exhibit, including the redacted potion, has been

file with the Securities and Exchange Commission separately.



/2/ Confidential treatment has been requested for this potion of this exhibit.

A complete copy of this exhibit, including the redacted potion, has been

file with the Securities and Exchange Commission separately.



2.04 Taxes. The amounts payable pursuant to this Article are exclusive of any

----- tariffs, duties or taxes, however designated, levied or based on this Agreement, including, without limitation, any sales and use taxes and any state and local privilege or excise taxes based on either Party's gross revenue. Each party agrees to pay and be responsible for all sales, use or excise taxes and levies that pertain to it with respect to this Agreement.



2.05 Retention of Records and Audit Rights.

-------------------------------------



(1) For a period of not less than two years after the termination of this

Agreement, each Party shall maintain, at its own cost, all material data,

files and records pertaining to such Party's performance under this

Agreement and to charges and costs paid or payable by either Party under

this Agreement.



(2) Upon reasonable notice from either Party, the other party shall provide

access to such financial records and supporting documentation as may be

reasonably requested by to audit the Quarterly Statements and any amounts

payable pursuant to Article 2 to verify compliance with the terms of this

---------

Agreement. If, as a result of such audit, either party determines that any

amounts are due, then the auditing Party shall notify the other Party of

such amount and the other Party shall promptly pay such amount, plus

interest at the rate of one half percent per month, but in no event to

exceed the highest lawful rate of interest, calculated from the date of

receipt of such notice. In the event any such audit reveals that either

Party owes an amount in excess of five percent of the actual Revenue

Sharing Fees due, that Party shall reimburse the other Party for the cost

of such audit.



2.06 Late Payments. Payments made after they are due in accordance with

------------- Section 2.03 shall be subject to ...