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Interactive Marketing Agreement

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Portions of this Exhibit have been omitted pursuant to a request for confidential treatment. The omitted portions, marked by [****], have been separately filed with the Commission.


CONFIDENTIAL
INTERACTIVE MARKETING AGREEMENT


This Agreement, dated as of September 1, 1997 (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 N2K Inc. ("N2K"), a New York corporation, with its principal offices at 55 Broad Street, 26th Floor, New York, NY 10004 (each a "Party" and collectively the "Parties").


INTRODUCTION


AOL and N2K each desire to enter into the interactive marketing relationship described below, subject to the terms and conditions set forth in this Agreement. Defined terms used but not defined in the body of the Agreement shall be as defined on Exhibit C attached hereto.


TERMS


1. PROMOTION, DISTRIBUTION AND MARKETING.


1.1 ONLINE LISTING AND PROMOTION OF N2K.


1.1.1 AOL SERVICE. N2K will receive an integrated package of
placements, promotions and links through the AOL Service
consisting of the following.


1.1.1.1 MUSICSPACE. AOL will continuously and
prominently place an N2K banner (the "MusicSpace
Banner") on the main screen of the "MusicSpace"
channel on the AOL Service ("MusicSpace"). The
MusicSpace Banner will continuously link to the main
page of the Customized MB Site (or such other
locations as may be mutually agreed upon by the
Parties). Branded genre screens within MusicSpace
(which currently include alternative, rock, pop,
country, r&b, jazz, world and classical and which may
be supplemented or modified by AOL in its editorial
discretion) will include (i) branded "Buy Now"
buttons which link to corresponding retailing
categories within the Customized MB Site, which
categories may include certain non-retailing-oriented
content, (or such other locations as may be mutually
agreed upon by the Parties), and (ii) unbranded "Buy
Now" links from Content related to individual
Products (including "New Releases" content) to
sales/fulfillment screens within the Customized MB
Site dedicated to the individual Products in question
or other fulfillment screens mutually agreed upon by
the Parties. The look and feel of 2
the MusicSpace Banner and "Buy Now" buttons and links
will be as mutually agreed upon by the Parties and
N2K will provide the graphics for such promotional
icons. In addition, AOL will integrate promotions for
and integration of the Customized MB Site in other
aspects of MusicSpace in AOL's reasonable editorial
discretion. AOL will not provide promotions,
advertising or integration within MusicSpace for any
other Online Music Retailer. Without limiting the
generality of anything else contained herein, AOL
reserves the right to redesign or modify the
organization, structure, "look and feel," navigation
and other elements of MusicSpace. In the event such
modifications materially and adversely affect the
promotional placements for N2K described above and
implemented as part of the "re-launch" of MusicSpace,
AOL will work with N2K in good faith to provide N2K
with a comparable package of promotional placements
in MusicSpace which are reasonably satisfactory to
N2K.


1.1.1.2 SHOPPING CHANNEL. AOL will provide N2K with
an "Anchor Tenant" position in the music retailing
department (the "Music Department") of the "Shopping"
channel of the AOL Service ("Shopping"). Such
positioning shall include the components described on
Exhibit B. AOL will only be entitled to include at
any time either (at AOL's option): (i) [****]
additional Online Music Retaile[****] within the
Music Department in comparable "Anchor Tenant"
position, which Online Music Retailer will not be
featured or promoted more prominently than N2K; or
(ii) [****] additional Online Music Retailers within
the Music Department in positions that will not be
featured or promoted as prominently as N2K. Among
"Anchor Tenant" positions devoted to music, N2K will
have its choice of such positions. The foregoing
placements will link to the Customized MB Site.

1.1.1.3 BANNER ADVERTISING. AOL will provide banner
advertising (the "Banners") which link to the
Customized MB Site in other areas of the AOL Service.
The Banners will have a value of [****], based on
AOL's then-applicable rate card. The Banners will be
rotated through the "Entertainment" channel of the
AOL Service, "Entertainment" chat rooms of the AOL
Service with music themes, select "Greenhouse"
properties on the AOL Service, "E-mail" components of
the AOL Service and such other areas of the AOL
Service as may be mutually agreed upon by the
Parties. AOL will develop the media plan for rotation
of the Banners; provided that: (i) Banners will not
be rotated through areas containing separate N2K
promotions; and (ii) areas for rotation not
specifically described above (e.g., a specific
"Greenhouse" property) will be subject to N2K's prior
written approval, which shall not be unreasonably
withheld or delayed. AOL will run [****]


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worth of Banners each year. N2K understands and
acknowledges that AOL plans to run approximately
thirty three percent (33%) of the Banners allocable
to each year during the period from October 1st
through December 31st. The remaining Banners will be
spread in a relatively even manner through the
remaining Initial Term of the Agreement (except to
the extent otherwise mutually agreed upon by the
Parties).


1.1.1.4 KEYWORDS. N2K will receive keywords for N2K
trademarks associated with: (i) Music Boulevard and
each of the N2K music genre-related brands (including
Jazz Central Station, Rocktropolis and Classical
Insites); and (ii) a reasonable number of names for
sites for or from which N2K has a right or license to
use the site names as keywords on the AOL Service
(for example, sites for Leonard Bernstein, Rolling
Stones and David Bowie). Keywords for any name not
specifically identified above will be subject to
approval by AOL; provided that: (i) such approval
will not be unreasonably withheld or delayed; and
(ii) AOL reserves the right to eliminate or re-direct
keywords associated with site names in its reasonable
discretion. The keywords will be included in AOL's
"Find" and "Directory of Services" features on the
AOL Service and operate independently through the
"Keyword" functionality on the AOL Service. The
keywords will link to the version of the applicable
N2K site customized for the AOL audience.


1.1.1.5 AOL ENTERTAINMENT. [****]


1.1.1.6 ADDITIONAL PLACEMENT. To the extent that AOL
creates additional, substantial music-specific
Content areas within portions of the AOL Service
separate from the areas of the AOL Service noted
above, AOL will consult in good faith with N2K
regarding the establishment of "Buy Now" or other
appropriate links from such areas to the Customized
MB Site; provided that, to the extent AOL
independently establishes any such specific links,
such links will be subject to the approval of N2K,
which will not be unreasonably withheld or delayed.


1.1.1.7 ARTIST/LABEL PROMOTIONS. To the extent that
AOL includes promotions within MusicSpace for
specific artists, record labels or recordings (but
not solely for Online Music Retailers) ("Artist
Promotions"), AOL will use reasonable efforts to
establish, in coordination with N2K, a "Buy Now" or
other link from the Artist Promotion to the
applicable product offering(s)


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within the Customized MB Site. To the extent that (i)
such a link is not established (because it would
prevent AOL from being able to run the Artist
Promotion or is otherwise deemed inappropriate in
AOL's reasonable editorial judgment) and (ii) the
Artist Promotion links directly to a screen where AOL
Members have the ability to order online and have
fulfilled pre-recorded music products by an entity
other than N2K, then the AOL Sales Royalties paid to
AOL for sales of pre-recorded music products through
the page directly linked to the Artist Promotion will
be [****] and [****]. AOL will not, in bad faith,
attempt to circumvent the intent of the foregoing
arrangement.


1.1.1.8 ONLINE MUSIC RETAILER SPONSORSHIPS. AOL will
be entitled to include promotional references to
Online Music Retailers within MusicSpace in cases
when the Online Music Retailer is acting as a sponsor
with respect to an artist tour or other event or is
otherwise engaged in a capacity other than as a
direct retailer of pre-recorded music products
("Sponsorship References"); provided that: [****].


1.1.2 AOL.COM. N2K will receive an integrated package of
placements, promotions and links through AOL.com consisting of
the following.


1.1.2.1 ENTERTAINMENT CHANNEL/MUSIC AREAS. AOL will
provide N2K with continuous placement within the
"Entertainment" channel on AOL.com ("AOL.com
Entertainment") (or the AOL.com Music Channel, as
defined below, in the event such separate channel is
created), linking to the Customized MB Site. N2K
links and promotions will also be integrated into
other AOL-programmed portions of AOL.com which are
dedicated to music, including NetFind Keyword:
"Music" and the music-retailing department of the
principal AOL shopping channel that may be created
for AOL.com. In these


4 5


areas, N2K will be promoted through a combination of
banner advertisements and cross-linking "we
recommend" buttons, each linking to the Customized MB
Site. In addition, AOL and N2K will work collectively
to develop special co-branding and promotional
opportunities to appear within these areas of AOL.com
(e.g., an N2K sponsored "album release of the week"
promotion).


1.1.2.2 AOL NETFIND SEARCH. N2K will be promoted on
the "results" pages for searches conducted through
the AOL NetFind search engine on AOL.com involving
music-specific search terms designated by N2K in
consultation with AOL, subject to reasonable
technical and implementation limitations specified by
AOL, and such non-music specific search terms as may
be mutually agreed upon. These "results" promotions
will link the Customized MB Site in a manner intended
to match the focus of the search with related
pre-recorded music products offered by N2K. The
"results" promotions will be comparable in nature to
similar promotions provided by AOL to any third party
(e.g., Amazon.com). There will initially be [****]
search terms giving rise to integrated "results"
promotions; and, by [****], AOL will also provide for
N2K advertising banners to appear in connection with
searches relating to agreed upon music search terms
for up to an additional [****] search terms. As and
to the extent AOL increases the number of search
terms giving rise to integrated "results" promotions,
AOL will decrease the number of search terms giving
rise to N2K advertising banners in a proportion to be
mutually agreed upon by the Parties (with such
proportion to, in any case, provide for greater than
one advertising banner search term to be reduced for
each integrated "results" promotion search term that
is added).


1.1.2.3 OTHER ONLINE MUSIC RETAILERS. Until such time
as AOL may create a separate music channel within
AOL.com (an "AOL.com Music Channel"), AOL will not
promote other Online Music Retailers [****]. In the
event that AOL creates an AOL.com Music Channel, then
AOL will not promote other Online Music Retailers
[****] (for so long as the AOL.com Music Channel is
promoted on such first page as a subset of or area
related to AOL.com Entertainment) or (iii) [****].
AOL will not provide other Online Music Retailers
with the integrated promotions or advertising related
to [****] AOL will not sell an Online Music Retailer
promotions [****].


5 6


1.1.3 GENERAL. The specific N2K content to be contained within
the promotional vehicles (e.g., Banners, buttons and links)
described above will be as determined by N2K, subject to AOL
technical limitations and AOL's then-standard, generally
applicable policies relating to advertising and promotions.
Except to the extent expressly described above, the specific
form, placement and nature of the promotional vehicles
detailed above will be as determined by AOL in its reasonable
editorial discretion (consistent with the editorial
composition of the applicable screens).


1.1.4 CHANGES TO AOL SERVICE. AOL reserves the right to
redesign or modify the organization, structure, "look and
feel," navigation and other elements of each of the AOL
Service and AOL.com. In the event such modifications affect
the promotional placements for N2K described above, AOL will
work with N2K in good faith to provide N2K with a comparable
package of promotional placements which are reasonably
satisfactory to N2K.


1.1.5 THIRD PARTY AREAS. The restrictions undertaken by AOL
with respect to other Online Music Retailers shall not extend
to "Digital Cities," "WorldPlay," "Entertainment Asylum," the
"Hub," any similar "sub-service" which is currently offered
by or through the AOL Network or any programming or content
area on the AOL Network which is provided and operationally
controlled by a third party content provider and not AOL;
provided that AOL shall not in bad faith rely on this
provision in order to avoid its commitments contained herein.
Upon N2K's request, AOL will use all reasonable efforts to
introduce N2K to the entities managing any appropriate
sub-services or third party content areas in order to assist
N2K in any efforts it undertakes to establish separate
relationships with such entities.


1.1.6 OTHERWISE RESTRICTED AGREEMENTS. AOL will not in bad
faith seek to enter into a transaction with a third party that
is substantially comparable to the named Online Music
Retailers, which transaction would otherwise be prohibited
hereunder if such third party had in fact been specifically
named as an Online Music Retailer (an "Otherwise Restricted
Agreement"). If, notwithstanding the foregoing, AOL enters
into an Otherwise Restricted Agreement with a third party that
is subsequently added to the list of Online Music Retailers
pursuant to notice by N2K: (i) AOL shall not be deemed to
have breached this Agreement by virtue of such Otherwise
Restricted Agreement; (ii) AOL will, subject to the terms of
the Otherwise Restricted Agreement, take commercially
reasonable steps to minimize the scope and duration of such
Otherwise Restricted Agreement (e.g., by foregoing renewal or
extension of the Otherwise Restricted Agreement); and (iii)
AOL will [****] under such Otherwise Restricted Agreement
([****] under the Otherwise Restricted Agreement), provided
that all such revenues shall [****].


6 7
1.1.7 PAYMENTS FROM AOL UNDER SECTION 1. AOL will pay N2K the
amounts required pursuant to Sections 1.1.1.7, 1.1.1.8 and
1.1.6 above on a quarterly basis. With each payment, AOL will
supply a report containing information which supports the
applicable payment.


1.2 N2K CROSS-PROMOTION.


1.2.1 GENERAL. Whenever N2K provides promotions for the
availability of the N2K Areas in off-line media, including
television, radio and print advertising, N2K will promote AOL
as the preferred access provider through which a user can
access the N2K Areas (and N2K shall not implement or authorize
any other promotions on behalf of any third parties which are
inconsistent with the foregoing).


1.2.2 SPECIFIC SITE PROMOTION. In any instances when N2K makes
off-line promotional reference to its interactive Sites,
including any promotional listings of the applicable "URL" for
such web site (each a "Site Reference"), N2K shall generally
include a comparable listing of the corresponding AOL
"keyword" for the Interactive Site N2K's N2K Areas, provided
such keyword exists. In addition, within each Interactive
Site, N2K shall include the following promotions during the
Term: (i) a prominent "Try AOL" feature where users can obtain
promotional information about AOL products and services and,
at AOL's option, download or order AOL's then-current version
of the client software for the America Online(R) brand service
and client software for any other AOL products or services
(e.g., AOL's Instant Messenger service); and (ii) links from
the Interactive Sites to AOL.com. AOL agrees to pay a bounty
to N2K for each AOL Member so acquired, which bounty shall be
negotiated by the parties in good faith.


1.2.3 OPERATING SYSTEM PROMOTION. With respect to any N2K
Interactive Site accessible or operating through any operating
system (including without limitation any Microsoft system) (an
"Operating System"), N2K shall (a) include in any such
Interactive Site a prominent "Try AOL" feature (and controls
and software relating to such feature) that will cause a user
of such site to link directly to AOL access software located
or present on or within the Operating System, such that the
user who already is an AOL Member will be connected to the AOL
Service and the user who is not an AOL Member will be
connected to an AOL registration screen (instead of the
Internet Referral Server or any similar service or successor
thereto), unless N2K is contractually restricted from doing
so. AOL agrees to pay a bounty to N2K for each AOL Member so
acquired, which bounty shall be negotiated by the parties in
good faith.


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1.2.4 EXCEPTIONS. N2K's will not be obligated to provide the
promotions for AOL described in this Section 1.2 in cases
when: (a) N2K does not control the applicable media vehicle;
and the party or parties controlling the media vehicle object
to inclusion of the AOL promotions; (iii) implementation of
the promotions would prevent N2K from entering into a
relationship with a third party; or (iv) where N2k would, in
order to obtain or implement the promotion, incur an
incremental, material expense which AOL does not agree to bear
following notice from N2K.


1.2.5 AOL PURCHASERS. Beginning no later than November 15,
1997 (the "Implementation Date"), to the extent N2K sends any
form of communications to AOL Purchasers, N2K will promote the
Customized MB Site as the location at which to purchase
Products (as compared to any more general or other site or
location); provided that: (i) such obligation shall not apply
with respect to AOL Members who purchased from N2K prior to
execution of this Agreement; and (ii) such obligation shall
not apply with respect to marketing solely related to the sale
of digitally distributed music products until such time as AOL
provides N2K with the opportunity to promote such sales
hereunder. Prior to the Implementation Date, N2K will not send
communications to AOL Purchasers other than communications
directly related to purchases by such AOL Purchasers.


1.3 MEMBER ACQUISITION PROGRAMS. The Parties will implement direct
marketing acquisition programs in accordance with Exhibit F in the case
of "Enhanced CDs," N2K will present AOL with a written opportunity to
be integrated with such the Enhanced CD and will negotiate in good
faith for a reasonable period of time regarding such opportunity prior
to providing any other Internet or online service provider.


1.4 AOL RESTRICTIONS. The restrictions on AOL's relationships with
third parties contained in this Agreement (and related revenue sharing
provisions enumerated in Section 1.1.7) (collectively, the "AOL
Restrictions") shall only apply with respect to the online marketing
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