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Amended And Restated Media Services Agreement

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Sectors: Retail
Governing Law: New York, View New York State Laws
Effective Date: November 08, 2010
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EXHIBIT 10.1

AMENDED AND RESTATED MEDIA SERVICES AGREEMENT

Dated as of

November 8, 2010

Between

ALLOY, INC.

and

dELiA*s, INC.

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AMENDED AND RESTATED MEDIA SERVICES AGREEMENT

This Amended and Restated Media Services Agreement (this " Agreement" ) is made as of the 8th day of November, 2010 (the " Execution Date" ), by and between Alloy, Inc., a Delaware corporation (" Alloy" or " Agent" ) and dELiA*s, Inc., a Delaware corporation (" dELiA*s " ).

RECITALS

WHEREAS, Alloy and dELiA*s entered into a distribution agreement (the " Distribution Agreement" ) which, among other things, outlined the terms and conditions of the distribution of all outstanding shares then held by Alloy of dELiA*s common stock on a pro rata basis to the shareholders of Alloy common stock as of December 19, 2005, the spinoff record date (the " Spinoff" );

WHEREAS, dELiA*s, either directly or through its Affiliates, is engaged in retail and direct response businesses primarily targeting the teenage girl and young women demographic group and Alloy, either directly or through its Affiliates, is engaged in the business of, among other things, providing media and marketing services primarily targeting the 10-24 year old market;

WHEREAS, in connection with the Spinoff, the dELiA*s and Alloy entered into a Media Services Agreement dated as of December 19, 2005 (the " Initial Effective Date" ), as amended from time to time (the " Original Contract" ) pursuant to which dELiA*s appointed Alloy to act as its exclusive third party agent for itself and its Affiliates for the purpose of among other things, selling, licensing, renting and otherwise making available to third parties the Company Media Assets (as hereinafter defined) and Agent accepted such appointment;

WHEREAS, the Original Contract terminates as of December 19, 2010, and Alloy and dELiA*s on behalf of themselves and their respective Affiliates each deem it in their best interests to continue with the arrangement on the terms and conditions herein set forth as of the Effective Date;

NOW THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Agent and dELiA*s (each, a " Party" and collectively, the " Parties" ), on behalf of themselves and their Affiliates hereby agree as follows:

1.

Defined Terms . Terms with initial capital letters used herein without immediate definition shall have the following meanings:

" Agent Material Adverse Effect" means any circumstance, change in or effect on the Agent which materially adversely affects the ability of Agent to meet its obligations set forth in this Agreement.

" Affiliate" as to any Person means any entity, directly or indirectly, through one or more intermediaries, controlling, controlled by or under common control with such Person.

" Alloy Business" means any business operated by Alloy and its Affiliates as of and subsequent to January 1, 2010.

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" Alloy Media Assets" means any and all assets currently or hereinafter acquired or operated by Alloy or any of its Affiliates enabling Persons to reach third parties to promote, market or advertise goods or services, including without limitation, the Alloy Websites and any branding, buttons, banners, navigation bars, and other placements and promotions or similar services and rights executed on, displayed on or using information derived or obtained from any Alloy Website; media boards; newspaper placement services; email, direct and database marketing; content licensing; database and list rental and licensing; sampling programs; research; and promotional, sampling and sponsorship programs.

" Alloy Websites" means any and all public-facing websites currently or hereinafter owned or operated by Alloy or any of its Affiliates, including the Alloy Flagship Websites and the Licensed URLs contained therein.

" Buyers" means those Persons who actually purchase other than through dELiA*s retail stores any Company Brand product either for themselves or another Person and the Persons for whom such products were purchased.

" Catalog Requestors" mean those Persons who request to receive a Company Catalog, offline or online.

" Claims" means all actions, causes of action, suits, debts, dues, sums of money, accounts, bonds, bills, covenants, contracts, controversies, agreements, promises, trespasses, damages, judgments, executions, claims, Liabilities, investigations, prosecutions and demands whatsoever, in law or equity, regardless of when made or asserted and regardless of whether fixed or contingent.

" Company" means, collectively, dELiA*s and any Affiliate of dELiA*s as of the Effective Date.

" Company Business" means the merchandising and retail businesses operated by the Company as of and subsequent to January 1, 2010 specifically related to the Company Flagship Brands, including, without limitation, the operation of the Company Websites and the Company Media Assets.

" Company Catalogs" means any catalog or publication acquired, launched or operated by the Company on and subsequent to January 1, 2010 and supporting the Company Flagship Brands.

" Company Flagship Brands" means the Alloy and dELiA*s merchandise brands.

" Company Flagship Websites" means those websites or webpages supporting the Company Flagship Brands except for the Alloy Flagship Websites.

" Company Material Adverse Effect" means any circumstance, change in or effect on the Company or any Company Media Asset that, individually or in the aggregate with any other circumstances (i) is materially adverse to the Company Business or any Company Media Asset or

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(ii) materially adversely affects or could reasonably be deemed to affect the ability of Agent to sell, license, rent or otherwise make available any Company Media Asset.

" Company Media Assets" means any and all assets of the Company held as of the Effective Date or hereinafter acquired and specifically supporting the Company Flagship Brands through which Persons connect with or otherwise reach third parties for the purpose of advertising, marketing or promoting products or services, including without limitation, the Company Websites and any branding, buttons, banners, navigation bars, and other placements and promotions or similar services and rights executed on, displayed on or using information derived or obtained from any Company Website; catalog print advertisements; catalog insertions; online upsell arrangements; in store retail promotions; and sample distribution, but excluding offline upsell arrangements.

" Company Websites" means the Company Flagship Websites and any website acquired, operated or maintained subsequent to the Effective Date by dELiA*s or any Affiliate of dELiA*s specifically supporting the Company Flagship Brands.

" Control" (including " controlled by" and " under common control with" ) means, with respect to any Person, the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise; provided that, but without limiting the generality of the foregoing, any Person owning, directly or indirectly, at least 50% of the voting securities or other, similar, equity interest of any other Person shall be deemed to " control" such other Person.

" Damages" means any and all costs, losses, Claims, Liabilities, fines, penalties, damages and expenses (including interest which may be imposed in connection therewith), court costs, and reasonable fees and expenses of counsel, consultants and expert witnesses, incurred by a Party hereto.

" Data" means information that identifies or describes an individual or an individual' s record of behavior or action, including without limitation, name, telephone, postal address, phone number, email, date of birth, gender, and any information listed on the Field Schedule (as hereinafter defined), but specifically excludes (i) credit card data, and (ii) any of the foregoing information acquired by a Party in connection with an acquisition of a company or business division.

" Direct Competitor" means any specialty retailer with mall based stores, catalog and/or internet sales channels which primarily targets teenage girls or young women in their 20s and offers for sale among its primary products apparel (including swimwear), footwear and/or accessories (with examples of some Direct Competitors being Forever XXI, Hollister, American Eagle, Aeropostale, Abercrombie & Fitch and Modcloth).

" Effective Date" means December 20, 2010.

" GAAP" means generally accepted accounting principles consistently applied by Alloy, with only such changes thereto as may be required under applicable FASB statements or similar governing accounting pronouncements.

" Indirect Competitor" means any retailer, manufacturer or wholesaler, not including a Direct Competitor, which offers for sale any apparel (including swimwear), footwear, accessory or bed linen product specifically intended for teenage girls and/or women in their 20s (e.g., Target

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featuring apparel, footwear, accessories or bed linens for teenage girls and/or women in their 20s).

" Intellectual Property" means (i) registered and unregistered trademarks, service marks, trade dress, logos, trade names and corporate names and registrations and applications for registration thereof together with all goodwill therein, (ii) inventions, ideas, conceptions of potentially patentable subject matter and patent disclosures, whether or not reduced to practice and whether or not yet made the subject of a pending patent application or applications, (iii) Internet URLs, domain name registrations and applications (and any interests therein), (iv) statutory invention registrations, patents, patent registrations and patent applications and all improvements thereto, (v) copyrights (registered or otherwise) and registrations and applications for registration thereof, (vi) computer programs and any related documentation and (vii) trade secrets and confidential business information, technology (including know-how and show-how), copyrightable works, financial, marketing and business data, pricing and cost information, business and marketing plans and customer and supplier lists and any other information owned or used by the Company in connection with the Company Business and provided to or made available to Alloy in connection with this Agreement.

" Liabilities" means liabilities, debts or obligations, whether accrued, absolute, contingent or otherwise, known or unknown.

" Media Costs" means collectively, the (i) Insertion Costs; (ii) Sampling Costs; (iii) Print Costs; and (iv) Data Fees.

" Media Payments" means, collectively, the (i) Website Fees; (ii) Print Fees; (iii) Insertion Fees; and (iv) Sampling Fees.

" Media Revenues" means, collectively, the (i) Website Revenues; (ii) the Print Revenues; (iii) Insertion Revenues; and (iv) Sampling Revenues.

" Online Registrants" mean those Persons who register to become a member of or request to receive additional information about goods and services offered in connection with the Alloy Business or by or through any Alloy Website.

" Ordinary Course of Business" means the operation of Company Business as operated in the ordinary course of business consistent with the usual and customary practices subsequent to January 1, 2010 without regard to the transactions contemplated by this Agreement.

" Person" means a natural person, corporation, limited liability company, partnership, trust, or joint venture, any governmental authority or any other entity or organization.

2. GENERAL OBLIGATIONS AND APPOINTMENT OF AGENT .

2.1 Appointment of Agent . Except as expressly set forth herein, dELiA*s hereby, on behalf of itself and its Affiliates, appoints Agent, and Agent hereby agrees to serve, as the Company' s exclusive agent for the limited purpose of selling, licensing, renting or otherwise making available any and all of the Company Media Assets to third parties in accordance with the provisions hereof, provided, however, the Parties expressly acknowledge and agree that Alloy is not appointed as agent for purposes of (i) Company marketing, promoting or advertising any Company Brand on its own behalf or (ii) any marketing, promoting or advertising undertaken in connection with the Master License Agreement dated February 24, 2003 by and between

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dELiA*s Brand, LLC and JLP Daisy LLC. Except as expressly set forth herein, the Company agrees that it shall not sell, license, rent, or otherwise make available (or offer for sale, license or rental) any Company Media Asset directly to any Person and that it shall direct to the Agent any and all inquiries it or any Affiliate receives regarding any Company Media Asset. Notwithstanding anything contained herein to the contrary, the terms and conditions of the Original Contract shall control and govern all matters thereunder arising or related to actions taken prior to the Effective Date.

2.2 Obligations of the Company .

2.2.1 Promotion of Agent . The Company shall advise third parties seeking to advertise through or gain access to the Company' s Media Assets of Agent' s exclusive, third party status and representation relationship of the Company as set forth in this Agreement.

2.2.2 Agent Account Representative . The Company shall maintain at its own expense skilled staff and other personnel it deems in its sole discretion necessary to meet its obligations herein set forth.

2.3 Independent Contractor . The Company and Agent expressly acknowledge and agree that no employment, partnership, or joint venture relationship is created by this Agreement. The Parties further agree as follows:

(a) Agent shall act at all times as an independent contractor under this Agreement;

(b) neither Agent nor anyone employed by, or acting for or on behalf of, Agent will be an employee of the Company, and the Company is not liable for employment or withholding taxes with respect to Agent or any employee of Agent;

(c) subject to the terms and provisions set forth herein, Agent shall be free to determine when, where and how Agent performs its responsibilities hereunder;

(d) Agent is free to contract with, and provide similar services to, any other Person regardless of whether such Person offers products or services identical or similar to those offered by the Company or any of its Affiliates; and

(e) Agent is to contract directly with a Person seeking to advertise through or gain access to any Company Media Asset and is free in its sole discretion to determine the prices at which it shall offer to such Person the Company Media Assets.

(f) Subject to the terms of this Agreement and Alloy' s superseding rights to the Company Media Assets as set forth herein, dELiA*s shall be entitled to use any Company Media Asset to promote, market or advertise itself or any Affiliate without Agent' s involvement.

2.4 No Additional Authority . Except as provided in this Agreement, Agent shall have no authority to enter into any contract, agreement or other arrangement or take any other action, by or on behalf of the Company, that would have the effect of creating any obligation or liability, present or contingent, on behalf of or for the account of the Company without the prior written consent of the Company.

2.5 Agent Obligations .

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2.5.1 Staffing . Agent shall maintain at its own expense the marketing and service capabilities, skilled sales staff and other personnel, and financial and managerial capability as it deems in its sole discretion necessary to meet its obligations herein set forth.

2.5.2 Training of Agent' s Sales Force . Agent shall, in its sole discretion, train members of Agent' s sales force in representing the Company Media Assets as such times as Agent, in its sole discretion, may determine is necessary to satisfy its obligations hereunder.

2.5.3 Marketing Efforts . Agent shall use its commercially reasonable efforts to promote and market the Company Media Assets and in fulfilling its other obligations in this Agreement.

2.6 Advertising Guidelines . Except as set forth herein, Company and Alloy agree to abide by the guidelines set forth on Schedule 2.6 (the " Advertising Guidelines" ) unless prior written approval of the dELiA*s Chief Operating Officer or Chief Executive Officer is obtained, which approval shall not be unreasonably withheld or delayed. If Agent fails to comply with the Advertising Guidelines applicable to Website Advertisements or the restrictions set forth in Section 6.5 with respect to Company Data, Agent shall pay to Company an amount equal to the profit recognized by Agent in connection with such noncompliant activities. In addition, if such noncompliance by Agent is not cured within twelve (12) hours after notification by Company (which may be via e-mail), then Company may turn off/disable all adservers serving the affected website until such noncompliance is cured by Agent.

3. LICENSE OF WEBSITES

3.1. (a) License by Alloy of Sub-Universal Resource Locators . Alloy shall maintain the domain names www.alloy.com and www.delias.com (collectively, the " Alloy Flagship Websites" ) as public facing websites. Alloy hereby licenses to the Company the right to use on an exclusive, non-transferable, royalty-free basis (i) the universal resource locator store.alloy.com within the www.alloy.com domain name for the purpose of displaying Alloy merchandise brand products (the " Alloy Licensed URL" ); and (ii) the universal resource locator store.delias.com contained within the www.delias.com domain name for the purpose of displaying the dELiA*s merchandise brand products (the " dELiA*s Licensed URL ," and together with the Alloy Licensed URL, the " Licensed URLs" ), all on the terms and conditions herein set forth. The Company may, in its sole discretion, transition from any or all of the Licensed URLs to another domain name of its choice (each a " Replacement URL" ), provided and on the condition that such transition in no way affects or relieves the Company of any of its obligations set forth in this Agreement. Any Replacement URL and the Licensed URLs shall be considered a " Company Flagship Website" . Alloy will not license any Alloy Licensed URL to a third party during the Term of this Agreement.

(b) Unless explicitly set forth herein, the Parties expressly acknowledge and agree that the Company shall control the Company Flagship Websites, and all content and graphics contained therein, including, without limitation: (a) creating and posting product information and descriptions at the Company Flagship Websites; (b) ensuring the accuracy and appropriateness of materials posted at the Company Flagship Websites and/or provided for use by Alloy on the Alloy Flagship Websites (including, among other things, all product-related materials); (c) ensuring that materials posted at the Company Flagship Websites and/or provided for use by Alloy do not violate or infringe upon the rights of any third party (including, without limitation, copyrights, trademarks, trade secrets, privacy or other personal or

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proprietary rights); (d) and ensuring that materials posted at the Company Flagship Websites and/or provided for use by Alloy are not libelous and comply with all applicable laws and regulations; and (e) use commercially reasonable efforts consistent with industry standards to ensure that no viruses, etc. are on or posted to the Company Flagship Websites. Company agrees to indemnify and hold harmless Alloy and its Affiliates from any Claims (i) arising from Company' s use of the Licensed URLs, including any information posted thereon; or (ii) in connection with or related to any Company Flagship Website; provided, however, Company shall not be obligated to indemnify Alloy for any Claim directly attributable to Alloy' s action or inaction. Notwithstanding anything contained herein to the contrary in this section, Company shall not be responsible in any way for content or graphics supplied by or provided either directly or indirectly through Alloy.

(c) Unless explicitly set forth herein, the Parties expressly acknowledge and agree that Alloy shall control the Alloy Flagship Websites, and all content and graphics contained therein, including, without limitation: (a) creating and posting of content and advertisements; (b) ensuring the accuracy and appropriateness of materials posted on the Alloy Flagship Websites; (c) ensuring that materials posted at the Alloy Flagship Websites do not violate or infringe upon the rights of any third party (including, without limitation, copyrights, trademarks, trade secrets, privacy or other personal or proprietary rights); (d) and ensuring that materials posted on the Alloy Flagship Websites are not libelous and comply with all applicable laws and regulations; and (e) use commercially reasonable efforts consistent with industry standards to ensure that no viruses, etc. are on or posted to the Alloy Flagship Websites or contained in Website Advertisements. Alloy agrees to indemnify and hold harmless Company and its Affiliates from any Claims (i) arising from the Alloy Flagship Websites, including any information posted thereon; or (ii) in connection with or related to any Alloy Flagship Website; provided, however, Alloy shall not be obligated to indemnify Company for any Claim directly attributable to Company' s action or inaction. Notwithstanding anything contained herein to the contrary in this section, Alloy shall not be responsible in any way for content or graphics supplied by or provided either directly or indirectly through Company.

(d) The Company shall require or request each Buyer, Catalog Requestor and Online Registrant to provide at least that information set forth on Schedule 3.1(d) (the " Field Schedule" ) as well as any information reasonably requested by Alloy from time to time and mutually agreed upon by the Parties.

(e) Compensation. dELiA*s shall pay to Alloy per each Licensed URL, the amount of twenty thousand Dollars ($20,000) per month for the right to use each such Licensed URL (collectively, the " License Fee" ). This License Fee shall be payable during the Term of this Agreement regardless of whether or not Company transitions from a Licensed URL to a Replacement URL; provided , however , that notwithstanding the foregoing to the contrary the License Fee shall not be payable with respect to www.delias.com and the dELiA*s Licensed URL from and after the Closing Date as defined in Section 11.3 below.


3.2.

Crosspromotion and Advertising Services .

3.2.1

Alloy shall:

(a)

establish and maintain the designated units on the homepage of www.alloy.com for the Company' s benefit with links from such units to shop.alloy.com or any Replacement URL thereto as set forth on Schedule 3.2.1(a) (" Alloy Link Schedule" ). For the avoidance of doubt Alloy may change the look and feel of the homepage of www.alloy.com in its sole discretion subject to inclusion of the identical designated units set forth on the Alloy Link Schedule, provided however that Alloy shall provide Company with thirty (30) days prior notice of any change so that the Company may revise its look and feel consistent with Alloy; and

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(b)

place a shop button with an embedded link to the corresponding Company Flagship Website on the first, left placement of the navigation bar on each page of each Alloy Flagship Website.

3.2.2

The Company shall:

(a)

establish, maintain and host www.delias.com (the " dELiA*s Domain ) to the extent requested by Alloy, which right Agent may rescind at anytime in its reasonable business judgment upon thirty (30) days prior written notice to Company, and for so long as Company hosts the dELiA*s Domain allocate exclusively to Agent those advertising units and links set forth on Schedule 3.2.2(b), with the understanding that if Agent shall elect to host the dELiA*s Domain, Agent shall make available to Company all inventory not allocated to Alloy as set forth on Schedule 3.3.2(b);

(b)

establish and maintain those advertising units on each page and subpage of the Licensed URLS (and any Replacement URL thereto) set forth on Schedule 3.2.2(b) (collectively, the " Shop Advertising Units" ).

(c)

establish and maintain a site navigation bar on each page and subpage of store.alloy.com (or any Replacement URL thereto) identical to the site navigation bar displayed on the homepage of www.alloy.com set forth on Schedule 3.2.2(c) (the " Alloy Nav Bar Schedule" ) with the understanding that Alloy may require the Company to revise such navigation bar so that it conforms with the navigation bar on the alloy.com homepage, provided that placement of the shop link shall not be changed without Company' s prior written consent;

(d)

establish and maintain a site navigation bar on each page and subpage of store.dELiAs.com (or any Replacement URL thereto) consistent with the site navigation bar displayed on the homepage of www.dELiAs.com set forth on Schedule 3.2.2(d) (the " dELiA*s Nav Bar Schedule" );

(e)

direct each Person who places, initiates or completes an online merchandise order to an Alloy Website or webpage thereof as Alloy designates as the Company' s exclusive representative pursuant to Section 3.3.5 herein subsequent to (i) completion of a merchandise order; or (ii) abandonment of a merchandise order after the Company has attempted to recapture the sale, with the understanding that such redirection shall occur before any upsell is offered or order confirmation, order completion, thank you or other similar message is displayed;

(f)

promote the applicable Alloy Flagship Website in a prominent manner on all bags and boxes used in connection with outgoing direct mail order shipments for the respective Company Flagship Brands; provided, that the Parties acknowledge that, in lieu of printing directly onto outgoing direct mail order shipment bags and boxes, the Company may print the applicable Alloy Flagship Website onto one or more tapes which tapes shall be affixed to bags and boxes by the Company' s sales and shipping personnel;

(g)

establish and maintain prominent advertisement and placement of www.alloy.com on the cover of each Alloy catalog and those certain pages therein as set forth on Schedule 3.2.2(g) (" Alloy Catalog Schedule" ), with such advertisement and

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placement to be effected in a manner consistent with those effected by the Company in the Ordinary Course of Business and Alloy shall pay Company $7,500 per year on the Effective Date and each anniversary thereof for such advertisement and placement, with the understanding that if this Agreement is terminated early pursuant to the terms and conditions of this Agreement Company shall refund to Alloy a prorated portion of such fees within ten (10) days of such termination;

(h)

establish and maintain prominent advertisement and placement of www.delias.com on the cover page of each dELiA*s catalog and those certain pages therein as set forth on Schedule 3.2.2(h) (" dELiA*s Catalog Schedule" ), with such advertisement and placement to be effected in a manner consistent with those effected by the Company in the Ordinary Course of Business and Alloy shall pay Company $7,500 per year on the Effective Date and each anniversary thereof for such advertisement and placement with the understanding that if this Agreement is terminated early Company shall refund to Alloy a prorated portion of such based fees within ten (10) days of such termination;

(i) establish and maintain on each Company Flagship Website the area set forth on Schedule 3.2.2(i) for the purposes of maintaining embedded links (the " Embedded Link Schedule" ), with the understanding that Alloy may require Company to edit the copy, including substitution of logos for text; provided , that Alloy may not edit more than once every six (6) months and any such changes may not exceed the current word count; and provided, further , that any substitution of logos for text shall not adversely affect the loading of such page and any graphics other than logos must be mutually agreed by the parties; and

(j) establish and maintain a link on each page and subpage of each Company FlagshipWebsite to a page of an Alloy Flagship Website designated by Alloy for the purpose of permitting Alloy to collect Data from Persons se
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