Exhibit 10.1

 

Web Site License Agreement

 

Parties:                                       This Web Site License Agreement
(“Agreement”) is made this 8th day of July, 2003 (“Effective Date”) by and
between Taymark, Inc., 4875 White Bear Parkway, White Bear Lake MN 55110
(“Taymark”) and iParty Corp., 1457 VFW Parkway, West Roxbury, MA 02132
(“iParty”).

 

Recitals:                              Taymark has developed and operates a
proprietary method of doing business that includes computer software, a goods
catalogue for products and an HTML template whereby customers can order party
related products over the World Wide Web portion of the Internet (the “System”).

 

iParty is in the business of selling party related goods to retail customers
through both retail stores and an Internet Web site, both of which operate under
the iParty® brand name.

 

iParty desires to license to Taymark the rights to use and have the benefit of
iParty’s brand name, goodwill, Web Site content and functions, and other
intellectual property in connection with the sale of party goods to retail
customers through a Web site to be accessed through the URL www.iParty.com.

 

Now Therefore, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Taymark and iParty agree as follows:

 

Definitions:

 

a.                                       “Licensed Intellectual Property” shall
mean iParty’s proprietary rights, including without limitation, trade marks,
trade secrets, copyrights, know how, and patents, in and to the items set forth
on Schedule 1 hereto. “Licensed Intellectual Property” shall not include the
System, any items, materials, data, descriptions or elements which are  in the
public domain, come into the public domain hereafter or were known by or used by
Taymark prior to the date hereof.

 

b.                                       “Licensed Mark” shall refer to the
marks “iParty” and “iParty.com” and any variations or derivatives thereof that
iParty may from time to time develop or use, together with the goodwill
associated therewith.

 

c.                                       “the Web Site” shall mean the Internet
Web site operated by Taymark pursuant to the terms and conditions of the
Agreement that offers party goods for retail sale in connection with the
Licensed Mark.

 

d.                                       “Customers” shall mean retail consumers
of party goods who use and/or purchase party goods through the Web Site.

 

e.                                       “Customer Data” shall mean personally
identifying data collected from Customers.

 

f.                                         “Privacy Policy” shall mean the
iParty’s privacy policy, a copy of which is attached hereto as Exhibit A and
amended to conform to this agreement including section 1.4

 

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g.                                      “Goods” shall mean the party goods
offered for sale by Taymark through the Web Site.

 

h.                                      “Goods Catalogue” shall mean the total
catalogue of Goods offered for sale by Taymark through the Web Site, as it may
change from time to time.

 

i.                                         “Transition Period” shall mean the
period of time between the date that a valid and effective notice is received by
one party from the other that this Agreement will terminate, not be renewed, or
otherwise expire, and the actual date that this Agreement terminates or
otherwise expires.

 

1.                                      Web Site License.

 

1.1                               License.  During the effective term of this
Agreement, iParty grants Taymark a license, subject to the terms and conditions
set forth herein, to use the Licensed Intellectual Property in connection with
the operation of the Web Site offering party goods for sale to Customers over
the Internet.  This license includes the right to use, reproduce, prepare
derivative works of, distribute, perform and display the content provided by
iParty as part of the Web Site, as appropriate in association with offering
Customers access to the Web Site and the Goods. iParty grants to Taymark a
non-exclusive right to use the Licensed Intellectual Property solely in
connection with the operation of the Web Site, advertising therefore and
performance of its duties hereunder. iParty grants to Taymark an exclusive right
to use the name “iParty.com” and the URL “www.iParty.com” in connection with the
operation of the Web Site, and performance of its duties hereunder.

 

1.2                               Use of Licensed Marks.  Taymark shall comply
with all reasonable conditions set forth in writing from time to time by iParty
with respect to the style, appearance and manner of use of the Licensed Marks,
provided that iParty shall not require modifications in Taymark’s use of the
Licensed Marks more frequently than once per year and shall pay all external
costs associated with such modifications.  In addition, a notice or notices
acceptable to iParty shall be used on the Web Site and/or related materials,
including but not limited to, promotional materials and advertising bearing the
Licensed Marks, to identify the licensed use under this Agreement and the
proprietary rights of iParty.  Such notice shall read “the [iParty] name and
mark are used under license.”  Taymark shall provide iParty with samples of
proposed uses of the Licensed Marks not less than fifteen (15) days prior to the
first instance of any public use of the Licensed Marks on the Web Site or
related materials, including advertising and promotional materials, for review
by iParty.  The proposed uses of the Licensed Marks shall be deemed approved
unless iParty notifies Taymark of its objections in writing within fifteen (15)
days of receipt of such samples.  Representative specimens showing the use of
the Licensed Marks and related materials shall be provided by Taymark to iParty
from time to time upon iParty’s reasonable request.

 

1.3                               Ownership of Intellectual Property.  Nothing
in this Agreement shall be construed to create ownership rights on the part of
either party to any of the intellectual property belonging to the other party,
any derivative works created there from, any variations thereof or modifications
thereto.  All such intellectual property shall be and remain the exclusive
property of its respective owner.

 

1.4                               Customer Data.  iParty shall own all
information and data related to Customers that is collected in connection with
Customers’ activities through the Web Site, regardless of the nature of the
information and data, or where such information and data is maintained
(“Customer Data”). iParty grants to Taymark a non-assignable, non-transferable,
non-exclusive right and license to use Customer Data solely in connection with
the operation of the Web Site and fulfilling its obligations under this
Agreement, and for no other purposes whatsoever.  iParty specifically retains
all right, title and interest in and to such Customer Data, except for the
limited license rights granted hereunder. Upon request, Taymark shall promptly
and accurately provide iParty (in a format and manner mutually agreed to by

 

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the parties) all Customer Data collected through the Web Site with respect to
Customers who visit, browse and make purchases on the Web Site, provided that
Taymark shall be under no obligation to independently verify the accuracy of the
Customer inputted information it collects.  During the Term, Taymark shall
maintain Customer Data for as long as commercially necessary to perform its
obligations under this Agreement and meet its internal business needs and
requirements in accordance with its standard record retention policies.  Upon
termination of this Agreement, Taymark shall promptly turn over to iParty all
copies of Customer Data, except that Taymark may retain Customer Data necessary
to maintain the record keeping requirements of paragraph 1.7, below and as may
be required to be kept in accordance with normal business practices.  The term
“Customer Data” shall not include information about persons gathered from
sources other than the Web Site, even though such persons may also be customers
of the Web Site.

 

1.5                               Additional License.  In addition to the
license rights set forth in Section 1.1, above, iParty grants Taymark a
non-exclusive, non-assignable, non-transferable, License to use certain of the
Licensed Intellectual Property, expressly limited to those items of intellectual
property set forth on Schedule II hereto, solely in connection with the
operation of other internet web sites owned and operated by Taymark.  The
license granted in this Section 1.5 shall survive the termination or expiration
of this Agreement unless this Agreement is terminated pursuant to Section 7.3
hereof due to the default or material breach of Taymark.

 

1.6                               Royalties.  Taymark shall pay all Royalties
due to iParty by either electronic funds transfer to an account designated by
iParty or by delivering a check to iParty, in either event, no later than the
twenty-first (21st) day of each calendar month for sales of Goods made through
the Web Site (and the telephone order number posted on the Web Site) the
preceding month. Taymark will also at the same time provide iParty with a
summary report of all sales and related activity for the preceding month. 
“Royalties” are equal to Net Sales multiplied by fifteen (15%) percent. For
purposes of this provision, “Net Sales” means the actual amounts collected from
Customers placing orders via the Web Site (and the telephone order number posted
on the Web Site) reduced by the amount of any taxes, shipping or handling
charges, rush charges, refunds, credits, and allowances.

 

1.7                               Taymark’s Records.  During the term of this
Agreement, Taymark shall keep and maintain in accordance with its normal
business practices at its primary U.S. place of business books and records of
all business transacted by Taymark in connection with the Web Site and the
Licensed Marks for such period as required to permit iParty’s review under this
Section 1.7.  Taymark’s accounting records of sales, shipment and returns of
Goods sold in connection with the Web Site and the Licensed Marks shall be
maintained in such a manner that Taymark can generate reports and records of
such sales, separate from Taymark’s accounting records relating to other items
distributed or sold by Taymark.  iParty, or its duly authorized agents or
representatives who shall be members of a nationally recognized firm of
certified public accountants, shall have the right at its own expense,
exercisable once in any twelve (12) month period, to inspect said books and
records at Taymark’s premises during regular business hours, provided that
iParty shall give to Taymark at least thirty (30) days’ prior notice of its
intention to do so, and provided further that iParty’s inspection rights may
relate to periods up to two (2) years prior to the date of such examination. 
All individuals to who may have access to Taymark’s books and records must sign
a confidentiality agreement on Taymark’s standard form.

 

2.                                      Web Site Functionality and Operation.

 

2.1                               Look and Feel.  The parties agree that the Web
Site operated by Taymark shall, to the extent that it is commercially and
technically feasible to do so, incorporate the appearance, features and
functionalities of the iParty.com Web Site presently operated by iParty.  At a
minimum, the Web Site will include the functionalities and features set forth on
Schedule III.

 

2.2                               Privacy and Security.  Taymark will maintain
the privacy of Customers and Customer identifying information, in accordance
with the Privacy Policy adopted by iParty and presently used by it in connection
with its operation of the iParty.com Web Site and modified to conform to with
the requirements of paragraph 1.4 of this agreement. Taymark will post a copy of
the Privacy Policy on the Web Site, which approval will not be

 

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unreasonably withheld.  All changes to the Privacy Policy must be approved by
iParty in writing prior to their implementation.  Taymark shall undertake
commercially reasonable security measures to prevent unauthorized access to, and
use of, and maintain the security, confidentiality and integrity of, the Web
Site.  Such measures shall include, at a minimum and without limitation: (a)
firewall protection; and (b) maintenance of independent archival and backup
copies of the main pages.  Taymark shall also be required to utilize Secure
Socket Layer (“SSL”) encryption when processing orders and accepting Customers’
personal and credit card information and shall apply for and obtain an SSL
certificate from Verisign or another mutually acceptable established encryption
key vendor .  Taymark will also operate the Web Site in compliance with the
requirements of the Children’s Online Privacy Protection Act.  Taymark will
implement and follow the policies and procedures set forth in the Privacy and
Security Statement issued by Taymark and James Tower.

 

2.3                               Hosting.  During the Term of this Agreement,
Taymark shall host the Web Site through a Web hosting company of Taymark’s
choosing.

 

2.4                               Exclusivity.  Taymark may use the Licensed
Intellectual Property only for the purposes set forth in this Agreement to
permit Customers to browse the Web Site and to place orders with Taymark for
fulfillment by Taymark and otherwise as set forth in Section 1.5 hereof.  In no
event shall Taymark be permitted to use the Licensed Intellectual Property for
any other purpose.

 

2.5                               iParty’s Additional Content.  Taymark will
include an “Investor Relations” HTML link on the Web Site home page.  The
Investor Relations link will link to a Web page providing iParty’s corporate and
investor relations information.  iParty, or a third-party designated by iParty,
will host and provide the content for the “Investor Relations” page and will be
responsible for maintaining and updating the information contained on it. 
Subject to Taymark’s approval, which may not be unreasonably withheld, iParty
may link other materials to the Web Site and link to the Web Site from existing
and future Web sites owned or controlled by iParty, or its affiliates.  Taymark
will include a store locations page on the Web Site that will contain the
locations, hours of operations, and the telephone numbers for iParty’s stores. 
iParty will provide the content for this page and will be responsible for
updating it.

 

2.6                               E-Mail and URL Hosting.  During the term of
this Agreement, iParty will continue to host the “iParty.com” URL on a domain
server (the “iParty Server”) of its choice.  iParty will cause hits to the
iParty.com domain to be directed away from the iParty Server to an Internet
Protocol address associated with the Web Site and designated by iParty.  Subject
to the terms and conditions of this Agreement, and the license granted herein,
Taymark may configure the Web Site so that Web Site content is displayed within
a Web page frame showing the www.iParty.com URL and located on the iParty
Server.  During the term of this Agreement, iParty will maintain e-mail service
associated with the iParty.com URL through a POP3 or equivalent server.  iParty
shall configure the POP3 server so that e-mail to the customercare@iParty.com;
gurus@iParty.com; remove@iParty.com; and privacy@iParty.com addresses, will be
forwarded to a POP3 server designated and accessed by Taymark.

 

2.7.                            Availability of Web Site.  Taymark shall use
commercially reasonable efforts to maintain availability of the Web site
twenty-four (24) hours a day, seven (7) days a week, throughout the term of
hereof.  Taymark shall use commercially reasonable efforts to process and
complete orders placed by Customers on the Web Site..

 

2.8                               Approval by iParty.  iParty shall have the
right to exercise its commercially reasonable approval of the concept for the
Web Site and all content to be included on the Web Site by Taymark.  The layout,
design and content of the Web Site shall initially be provided to iParty prior
to the anticipated launch of the Web Site and, thereafter, prior to posting on
the Web Site.  Changes to the overall look and feel, features or functions of
the Web Site shall require iParty’s express prior written approval.  Provided,
however, that Taymark may update the content of the site from time to time to
reflect new Goods offerings, sales, promotions and other marketing efforts of
Taymark without such prior written approval from iParty.  Taymark shall not
permit the site to contain any pornographic, obscene or offensive material or
content that reflects negatively on the Licensed Marks.

 

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2.9                               Taymark may modify the Web Site as required by
applicable law if Taymark, in its reasonable discretion, determines such
modifications are necessary.

 

3.                                      Prices and Goods Catalogue.

 

3.1                               Retail Prices.  The Web Site will be
configured to include Taymark’s online Goods Catalogue and Taymark’s retail
price to the Customers for the goods.  Taymark will endeavor to establish prices
for the Goods that are, on an overall basis, competitive with the usual and
customary retail price for Goods charged by other internet based retail party
goods businesses, excluding any sale or promotional items.

 

3.2                               Goods Catalogue. Taymark reserves the right,
in its sole discretion and without incurring any liability to iParty or
Customers, to:  (a) alter the specifications for any products in the Goods
Catalogue; (b) discontinue the manufacture or availability of any products in
the Goods Catalogue; (c) discontinue the development of any new product, whether
or not such product has been announced publicly or is included in the Goods
Catalogue; or (d) commence the manufacture and sale of new products having
features which make any product in the Goods Catalogue wholly or partially
obsolete, whether or not iParty is granted any distribution rights in respect of
such new products.  Notwithstanding the above, Taymark shall provide iParty with
notice of such decisions and shall fill all accepted purchase orders from the
Customers for any such altered or discontinued products of which manufacturing
and commercial deliveries have commenced.  Taymark shall provide iParty with a
report identifying all of the items contained in the Goods Catalogue on a
quarterly basis.  iParty shall have the right to review and inspect the products
from the Goods Catalogue offered on the Web Site to Customers once in any
calendar quarter.  The purpose of this review and inspection is to allow iParty
to ensure that the quality and selection of products offered on the Web Site do
not damage the Licensed Marks or the goodwill associated therewith.  As part of
this review, iParty shall have the right to have products removed from the
selection of products offered on the Web Site. iParty shall have the right to
request that products be added to the Goods Catalogue, including without
limitation products sourced through third party vendors, and Taymark will
reasonably consider al such requests.  If iParty requests that certain products
be added to the Goods Catalogue and Taymark declines to do so, iParty may
guarantee in writing a commercially reasonable amount of sales for those
products, purchase; the inventory for Taymark or take such other steps as it may
find appropriate.  In that event, Taymark may add such products to the Goods
Catalogue if it believes it is commercially reasonable to do so.

 

3.3                               Inventory.  Taymark will maintain inventory in
such amounts as Taymark in its sole discretion deems appropriate.  In the event
iParty believes inventory levels of products are inadequate, iParty may notify
Taymark and the parties will meet and attempt to resolve any differences.

 

3.4                               Promotions.  Taymark may from time to time
promote the Web Site to Customer by means of us such promotions and advertising
campaigns as the parties may mutually agree. iParty shall have the right,
without payment to Taymark, to produce and distribute promotional brochures or
inserts, point of sale displays or other advertising materials displaying the
Web Site name, including in conjunction with iParty’s retail stores. All such
promotional brochures or inserts, point of sale displays or other advertising
materials which describe any Goods on the Web Site, offer discounts, free
shipping, kickers, or anything of value and which display the Web Site name must
be approved in writing by Taymark before they are displayed or distributed to
the public.  Taymark shall have the right to refuse to honor any such promotions
that are not approved in writing in advance by Taymark.

 

3.5                               Advertising.  Neither party shall have the
right to place banner or other advertising, including “pop-up windows” on the
Web Site without the other party’s written consent, which consent may be
withheld at the sole discretion of that party. In the event the parties agree to
place any advertising on the Web Site, the parties shall also agree on the
division of revenues.

 

4.                                      Customer Transactions.

 

4.1                               Ordering.  Taymark shall collect all data
necessary to process and fulfill Customer orders received through the Web Site. 
The Web Site will contain a telephone number that Customers may use to place
orders. The parties agree that orders received by Taymark through that telephone
line shall be

 

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deemed to be received through the Web Site and treated the same as orders
received through Web Site.

 

4.2                               Shipment of Goods.  Taymark shall ship each
order which Taymark accepts as specified by the respective Customer to the
Customer’s designated point of delivery submitted with the order. Taymark may
only deliver to addresses within the United States, U. S Virgin Islands, and
Canada. Taymark will also ship to APO and FPO addresses. Taymark will use
commercially reasonable efforts to fill and ship orders in a timely fashion or
in the time frame indicated by the Web Site. Taymark may reject orders with
incomplete order information, incomplete shipping information or for shipment
outside the United States, U. S Virgin Islands, and Canada.

 

4.3                               Fulfillment.  Taymark will use commercially
reasonable efforts to: (a) maintain sufficient inventory to fulfill Customer
orders; and (b) meet the following shipping goals set forth below:

 

4.3.1                     Standard.  ”Standard Orders” means Orders shipped
domestically and internationally via carriers other than overnight carriers and
two-day carriers.  Provided that Taymark has received credit approval by 12:00
noon Central Time on the day of receipt of a Standard Order, Taymark will ship
such Standard Order no later than 7:00 p.m., Central Time, the second Business
Day following receipt by Taymark of credit approval for such Standard Order.
Standard Orders for which credit approval is received after 12:00 Noon, Central
Time on any Business Day, or at any time on any day which is not a Business Day,
will be shipped no later than 7:00 p.m., Central Time the third Business Day
following receipt of credit approval.

 

4.3.2                     Priority.  ”Priority Orders” means Orders shipped
domestically or internationally via overnight or two-day carrier.  Priority
Orders for which credit approval has been received by Taymark on any Business
Day before 12:00 Noon, Central Time will be shipped on the same day.  Priority
Orders for which credit approval is received after 12:00 Noon, Central Time on
any Business Day, or at any time on any day which is not a Business Day, will be
shipped on the following Business Day.  Taymark may charge added shipping and
handling charges for such Priority Orders.

 

5.                                      Customer Service and Returns.

 

5.1                               Customer service and returns will be processed
through the Web Site by linking to a page which Taymark will identify as the
“Customer Service Contact”.  iParty shall notify Taymark as soon as possible
after receipt of products by iParty or its Customer of any complaint whatsoever
iParty or its Customer may have concerning such products. Customer Returns will
be handled in accordance with return policy set forth on Schedule B.

 

6.                                      Taxation.

 

6.1                               Taymark shall collect sales taxes within such
jurisdictions as Taymark has a legal obligation to do so.  iParty and the
respective Customer may be liable for sales, use or other taxes which are not
collected by Taymark.  Each party shall indemnify, defend and hold the other
party harmless with respect to any claims arising from the indemnifying party’s
failure to collect, report or pay sales, use, or other taxes, in accordance with
applicable tax laws and regulations.

 

7.                                      Term and Termination.

 

7.1                               The term of this Agreement is two years from
the Effective Date and shall renew on a yearly basis unless either party
provides notice of non-renewal to the other in writing more than one hundred
eighty  (180) days before the end of any term.

 

7.2                               Either party may terminate this Agreement upon
180 days notice without cause.

 

7.3                               Either party may immediately terminate this
Agreement for cause at any time upon written notice to the other Party in the
event of the occurrence of one or more of the following events: (i) if a
petition under any foreign, state, or United States bankruptcy act, receivership
statute, or the like, as they now exist, or as they may be amended, is filed by
the other party; or (ii) if such a petition is filed by any third party, or an
application for a receiver of the other party is made by anyone, and such
petition or application is not resolved favorably by such party within 90 days;
or (iii) the other party materially breaches any of its representations,
warranties, obligations or agreements hereunder, and such breach, if capable of
being cured, is not cured within 60 days following receipt of written notice of
such breach from the non-breaching party.

 

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7.4                               Transition Period.  During the Transition
Period, Taymark will continue to accept and fill Customer orders out of its
regular inventory.  If Licensee reasonably expects that it will not be able to
meet Customer demand for certain Goods from its inventory during the Transition
Period, then Licensee shall provide Licensor with a description of such Goods. 
iParty may offer to guarantee in writing a commercially reasonable amount of
sales for those Goods, purchase the Goods for Taymark, or take such other steps
as it may find appropriate. Taymark may accept such offer if it believes it is
commercially reasonable to do so. During the Transition Period, Taymark shall
cooperate with iParty with respect to the transfer and return the Licensed
Intellectual Property to iParty or its designee; the transfer of the
www.iParty.com URL to Taymark; and the establishment by iParty or its designee
of a successor Web site located at the URL with a minimum of disruption and
inconvenience to Customers.

 

7.5                               Return of Licensed Intellectual
Property.  Except as otherwise set forth in Section 1.5 hereof, Taymark shall
return all Licensed Intellectual Property, and all tangible embodiments thereof,
to iParty upon the expiration or other termination of this Agreement and Taymark
shall have no further rights of use thereof.

 

7.6                               No Further Compensation.  In the event either
party terminates this Agreement in accordance with the terms hereof, the parties
hereby agree that, without prejudice to any other remedies which either party
may have in respect of any breach of this Agreement, neither party shall be
entitled to any compensation, reimbursement or like payment from the other
solely as a result of such termination.

 

8.                                      Confidential Information.

 

8.1                               “Confidential Information”  means all
non-public information and ideas, including, but not limited to, information
regarding a party’s business, financial condition, operations, products,
services or finances, disclosed by such party (either orally or in writing) to
the other party.  Taymark and iParty may have previously exchanged and may
exchange certain Confidential Information relating to the development and
implementation of the Web Site, the design thereof, and any modification
thereof.  It is the intention of Taymark and iParty that this information shall
be used by the other party solely for the purpose of implementing and operating
the Web Site and for no other purpose.  Each party shall endeavor to designate
any information or ideas it communicates to the other party which it, in good
faith, believes constitutes “Confidential Information” by marking it as
Confidential. Such designation is for informational purposes only and the
designation, or lack thereof, is not determinative of the confidential nature of
the information.

 

8.2                               Non-Disclosure.  No party and no
representative of a party shall disclose to any other person or use the
Confidential Information without the prior written consent of the other party. 
In addition, without the prior written consent of the other party, no party and
no representative of a party shall disclose to any other person the fact that
Confidential Information has been made available.

 

8.3                               Return of Confidential Information.  In the
event that this Agreement is terminated or otherwise expires, no party and no
representative of a party shall use, for any purpose, any of the Confidential
Information now or hereafter received or obtained from the other party or its
Representatives. All Confidential Information (and all copies, summaries, and
notes or the contents or parts thereof) shall be returned to the disclosing
party within thirty (30) days of such termination or expiration and shall not be
retained by the other party or its representatives in any form or for any
reason.

 

8.4                               Exclusions.  A party or its representative may
retain, disclose or otherwise use Confidential Information to the extent that
such Confidential Information (a) shall have been made public other than through
acts of, or attributable to, such party or its Representatives in violation of
this Agreement; (b) is required to be disclosed by law; or (c) has been
independently developed by such party or its Representatives without violating
any obligations under this Agreement.  If any governmental agency or any third
party shall seek in any way to discover or otherwise gain access to, or
production of (“Discovery”) any Confidential Information or any other data or
records of one party that may be in the possession of the other party, the other
party shall immediately notify the first party and shall, at the first party’s
written request and at the first party’s expense, oppose such Discovery, and
cooperate with the first party in the first party’s efforts to preclude,

 

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quash, limit or impose protective orders or similar restrictions on such
Discovery.

 

9.                                      iParty’s Warranties.

 

9.1                               iParty has sufficient right, title and
interest in and to the Content to enter into and perform this Agreement and to
grant the license rights granted to Taymark. “Content” shall mean the Licensed
Intellectual Property, and all other materials provided by iParty for inclusion
in the Web Site.

 

9.2                               iParty represents and warrants that the
Licensed Intellectual Property, the Content and any additional content posted on
the Web Site by or at iParty’s direction does not:  (I) violate or infringe any
trademark, trade dress, or copyright; (II) constitute a libel or defamation of
or an invasion of the rights of privacy or publicity of any person, firm or
corporation or violate any other right, title or interest of any other person,
firm or corporation; (III) violate any law or regulation; or (IV) contain
materially false, inaccurate or misleading information.

 

10.                               Taymark’s Warranties.

 

10.1                        Taymark represents and warrants that the System and
any materials (other than the Licensed Intellectual Property, Content or
additional content provided by iParty) used in connection with the operation of
the Web Site or posted on the Web Site by or at Taymark’s direction does not: 
(I) violate or infringe any trademark, trade dress, or copyright; (II)
constitute a libel or defamation of, or an invasion of the rights of privacy or
publicity of any person, firm or corporation or violate any other right, title
or interest of any other person, firm or corporation; (III) violate any law or
regulation; or (IV) contain materially false, inaccurate or misleading
information.

 

11.                               Indemnification.

 

11.1                        iParty Indemnification.  iParty shall indemnify,
defend, and hold harmless Taymark, its parent, divisions, subsidiaries,
affiliates, directors, officers, employees and agents, and defend any action
brought against the same with respect to any claim, demand, cause of action,
debt or liability, including reasonable attorneys’ fees, to the extent that the
same is based upon a claim that: (i) if true, would constitute a breach of any
of iParty’s representations, warranties, or obligations hereunder; (ii) arises
out of the negligence or willful misconduct of iParty; (iii) any of the Content,
or additional content posted on the Web Site at the request of iParty or the
Licensed Intellectual Property, or any portion thereof, infringes or violates
any patents, copyrights, trade names, trade secrets, licenses, or other
proprietary rights of any third party.

 

11.2                        Taymark Indemnification.  Taymark shall indemnify,
defend, and hold harmless iParty, its parent, divisions, subsidiaries,
affiliates, directors, officers, employees and agents, and defend any action
brought against the same with respect to any claim, demand, cause of action,
debt or liability, including reasonable attorneys’ fees, to the extent that the
same is based upon a claim that: (i) if true, would constitute a breach of any
of Taymark’s representations, warranties, or obligations hereunder; (ii) arises
out of the negligence or willful misconduct of Taymark; (iii) arises out of or
in any way relates to any of the Products, or the use thereof, sold to Customers
through the Web Site; and (iv) the operation or content of the Web Site or any
portion thereof, or the System or any portion thereof, but in any event
excluding the Licensed Intellectual Property, Content and any additional content
provided by iParty, infringes or violates any patents, copyrights, trade names,
trade secrets, licenses, or other proprietary rights of any third party.

 

11.3                        Insurance.  In furtherance of Taymark’s covenants
contained in the preceding subparagraph, each party agrees to carry general
commercial liability insurance with a minimum limit of liability of at least
Five Million Dollars ($5,000,000) per occurrence and the other party shall be
named as an additional insured party therein.  A certificate evidencing the
existence of such insurance policy shall be delivered within thirty (30) days of
the execution of this Agreement.

 

12.                               Limitations on Liability.

 

12.1                        IN NO EVENT SHALL EITHER PARTY OR THEIR RESPECTIVE
DIRECTORS, OFFICERS, PARENT COMPANIES, AND AFFILIATES, LICENSEES AND SUPPLIERS,
BE LIABLE FOR ANY LOST DATA OR CONTENT, LOST PROFITS, BUSINESS INTERRUPTIONS OR
FOR ANY INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL, EXEMPLARY OR

 

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PUNITIVE DAMAGE ARISING OUT OF OR RELATING TO THIS AGREEMENT, EVEN IF ADVISED TO
THE POSSIBILITY OF SUCH DAMAGES, AND NOTWITHSTANDING THE FAILURE OF ESSENTIAL
PURPOSE OF ANY LIMITED REMEDY.

 

13.                               General Provisions.

 

13.1                        Force Majeure.  In the event that either party is
unable to perform any of its obligations under this Agreement or to enjoy any of
its benefits because of any event beyond the control of the affected party
including, but not limited to, natural disaster, acts of God, actions or decrees
of governmental bodies or failure of communication lines, but excluding employee
strikes or a shortage of supplies or personnel (an “Event”), the party who has
been so affected shall promptly give written notice to the other party and shall
use its best efforts to resume performance.  Upon receipt of such notice, all
obligations under this agreement shall be immediately suspended for the duration
of such Force Majeure Event.

 

13.2                        Notice.  All notices, demands, requests or other
communications required or permitted under this Agreement will be deemed given
when (i) delivered personally; (ii) five (5) days after having been sent by
registered or certified mail, return receipt requested, postage prepaid; or
(iii) one (1) business day after deposit with a commercial overnight carrier,
with written verification of receipt, unless otherwise indicated in this
Agreement.  Taymark may provide notice of price adjustments by e-mail or by U.S.
mail and any such notice shall be effective as of the date specified therein.

 

13.3                        Waiver.  Waiver of any breach, or failure to enforce
any term of this Agreement shall not be deemed a waiver of any breach or right
to enforce which may thereafter occur.  No waiver shall be valid against any
party hereto unless made in writing and signed by the party against whom
enforcement of such waiver is sought and then only to the extent expressly
specified herein.

 

13.4                        Severability.  In the event any one or more of the
provisions of this Agreement shall for any reason be held to be invalid, illegal
or unenforceable, the remaining provisions of this Agreement shall be unimpaired
and the parties will substitute a new enforceable provision of like economic
intent and effect.

 

13.5                        Applicable Law.  This Agreement, the rights and
obligations of the parties hereto, and any claims or disputes thereto, shall be
governed by and construed in accordance with the laws of the State of Minnesota
without reference to conflict of law principles.

 

13.6                        U.N. Convention.  The United Nations Convention on
Contracts for the International Sale of Goods shall not apply to this Agreement.

 

13.7                        Compliance with Laws.  Each Party shall comply with
all applicable international, national, state, regional and local laws and
regulations, and industry customs in conducting business and performing its
obligations hereunder.

 

13.8                        Assignment.  Neither party shall have the right to
assign this Agreement without the prior written consent of the other party.  The
transfer of a majority of the capital stock or substantially all of the assets
of a party or a change in actual control of a party shall be deemed an
assignment for the purposes of this section and any purported assignment without
the other party’s consent shall be void and shall be a breach of this Agreement.
A party shall not unreasonably withhold consent to an assignment provided that
the assignee meets the non-assigning party’s standards for credit worthiness,
business acumen, reputation, morality and all other factors deemed relevant by
the non-assigning party. The potential assigning party and the potential
assignee shall provide the non-assigning party all information reasonably
requested by it relevant to its determination.

 

13.9                        Initial Attempt to Resolve Dispute.  In the event of
any dispute or disagreement between the parties either in interpreting any
provision of this Agreement or about the performance of either party, then upon
the written request of either party, each of the parties will appoint a
designated representative to resolve such dispute or disagreement. The
designated representatives will discuss the problem and negotiate in good faith
in an effort to resolve the dispute without any formal proceeding. During the
course of such negotiation(s), all reasonable requests made by one party to the
other for information, including copies of relevant documents, shall be

 

9

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honored. The specific format for such discussions will be left to the discretion
of the designated representatives.  If the designated representatives are unable
to resolve the dispute within 30 days after their first meeting, either party
may seek mediation and arbitration of the dispute as set forth in Section 13.10
below.

 

13.10                 Mediation and Arbitration of Dispute.  Except for the
right of either party to apply to a court of competent jurisdiction for a
temporary restraining order, preliminary injunction or any other equitable
relief to preserve the status quo or prevent irreparable harm pending the
selection and confirmation of a panel of arbitrators, any dispute arising under
this Agreement that cannot be resolved as set forth in Section 13.9 above shall
be resolved through a mediation-arbitration approach. The parties agree to first
try to resolve the dispute informally with the help of a mutually agreed-upon
third party mediator. If it proves impossible to arrive at a mutually
satisfactory solution through mediation, the parties agree to submit their
dispute to binding arbitration in Minneapolis Minnesota in accordance with the
Commercial Arbitration Rules of the American Arbitration Association, except as
modified herein.  The arbitration may be conducted by one impartial arbitrator
by mutual agreement or by three arbitrators if the parties are unable to agree
on a single arbitrator within 30 days of first demand for arbitration. All
arbitrators are to be selected from a panel provided by the American Arbitration
Association.  Upon request of a party, the arbitrators shall have the authority
to permit discovery to the extent they deem appropriate. A court reporter shall
record the arbitration hearing and the reporter’s transcript shall be the
official transcript of the proceeding. The arbitrators shall have no power to
add or detract from the agreements of the parties and may not make any ruling or
award that does not conform to the terms and conditions of this Agreement. The
arbitrators shall have the authority to grant injunctive relief in a form
substantially similar to that which would otherwise be granted by a court of
law. The arbitrators shall have no authority to award punitive damages or any
other damages not measured by the prevailing party’s actual damages. The
arbitrators shall specify the basis for any damage award and the types of
damages awarded. The decision of the arbitrators shall be final and binding on
the parties and may be entered and enforced in any court of competent
jurisdiction by either party.  The prevailing party in the arbitration
proceedings shall be awarded reasonable attorneys’ fees, expert witness costs
and expenses, and all other costs and expenses incurred directly or indirectly
in connection with the proceedings, unless the arbitrators shall for good cause
determine otherwise.  Neither party nor the arbitrators may disclose the
existence, content, or results of any arbitration hereunder without the prior
written consent of both parties or except as required by law, regulations
promulgated thereunder, reporting requirements of and to the Securities and
Exchange Commission, or court order.

 

13.11                 Further Assurances.  Each of the parties hereto agrees to
take or cause to be taken such further actions, to execute, deliver and file or
cause to be executed, delivered and filed such further documents, and will
obtain such consents, as may be necessary or as may be reasonably requested in
order to fully effectuate the purposes, terms and conditions of this Agreement.

 

13.12                 Section Headings.  Section headings contained in this
Agreement are inserted for convenience or reference only and shall not in any
way limit or affect the meaning, construction or scope of any of the provisions
hereof.

 

13.13                 Counterparts.  This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original, and all of which,
when taken together, shall constitute one and the same instrument.

 

13.14                 Relationship of the Parties.  The relationship of the
parties hereunder shall be that of independent contractors.  Nothing herein
shall be construed to constitute a partnership between or joint venture of the
parties, nor shall either party be deemed the agent of the other or have the
right to bind the other in any way without the prior written consent of the
other.

 

13.15                 No Third-Party Beneficiaries.  This agreement is solely
for the benefit of the parties and their respective successors and permitted
assigns, and no other person has any right, benefit, priority or interest under,
or because of the existence of, this agreement.

 

13.16                 Jurisdiction.  Subject the provisions of Section 13.10;
all disputes arising out of or relating to

 

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this Agreement shall be submitted to the non-exclusive jurisdiction of the state
and federal courts in the State of Minnesota, and each party irrevocably
consents to such personal jurisdiction and waives all objections thereto.

 

13.17                 Survival of Provisions.  In the event of any termination
of this Agreement, the following provisions of this Agreement, Sections 1.3-1.7,
7.5, 7.6, 8.1-8.4, 13 and such other provision and Section that may be specified
in the Agreement, are intended to continue and survive and shall so continue and
survive beyond the termination of this Agreement.

 

13.18                 Additional Agreement.  Contemporaneous with the execution
of this Agreement, the parties hereto have entered into an Exclusive Sales
Representative Agreement, (the “Exclusive Sales Representative Agreement”) a
copy of which is attached hereto as Exhibit C.

 

13.19                 Entire Agreement.  This Agreement and the Exhibits and
Schedules attached hereto, constitute the entire understanding and contract
between the parties and supersedes any and all prior or contemporaneous oral and
written communications regarding the subject matter, all of which communications
are merged herein.  It is expressly understood and agreed that no employee,
agent or other representative of Taymark has any authority to bind Taymark as to
any statement, representation, warranty or other expression unless the
statement, representation, warranty or other expression is specifically included
within the express terms of this Agreement.  This Agreement shall not be
modified, amended or in any way altered except by an instrument in writing
signed by both of the parties.

 

IN WITNESS WHEREOF, this Agreement has been executed by or on behalf of each of
the parties hereto as of the day and year first above written.

 

Taymark, Inc.

 

 

 

By:

/s/ Jonathan Staruck

 

 

 

Its:

General Manager

 

 

 

IPARTY CORP.

 

 

 

By:

/s/ Patrick Farrell

 

 

 

Its:

President

 

 

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EXHIBIT A

PRIVACY POLICY

 

iParty.com is strongly committed to protecting the privacy of our customers,
though we make every effort to preserve user privacy, we may need to disclose
personal information when required by law wherein we have a good-faith belief
that such action is necessary to comply with a current judicial proceeding, a
court order or legal process served on our Web site.

 

If you have questions or concerns regarding this statement, you should first
contact us at customercare@iparty.comat:

 

4875 White Bear Parkway
White Bear Lake, MN 55110
or you can reach us by telephone at 800-447-2789

Is it safe to make online purchases from iParty.com?
Yes. We have made data security a priority. When a purchase is made or when
personal information is provided to us, we use Secure Sockets Layer (SSL)
technology to ensure that your information is encrypted. This means that no one
else can read it while it is being transmitted over the Internet. SSL is
regarded as the industry standard among encryption technologies. It is among the
best software available today for secure commerce transactions.

 

What do you do with my information?
Simply put, we use your information to serve you better. iParty is committed to
quality customer experience. For customers who make a purchase at iParty.com, we
record which pages you visited and any other information volunteered during the
ordering and registration process. All of this information is kept confidential.
We aggregate this data anonymously to analyze how people use our site and to
learn how we can improve their shopping experience. We may also use the
information we collect to notify you about important functionality changes to
the Web site, new iParty services and special offers we think you’ll find
valuable. This may also include special offers, information on upcoming retail
store promotions and other marketing related information for the iParty.com Web
site, retail stores and/or on behalf of our carefully selected promotional
partners. For customers only browsing iParty.com, our site automatically
recognizes your Internet service provider, but cannot identify you as an
individual.

 

What are cookies and how are they used?
To optimize your shopping experience we use a common Web browser feature called
a cookie. Cookies are small files that your Web browser places on your
computer’s hard drive. Some of them expire after a set period of time. Others
expire as soon as you close your browser. Cookies help us keep track of items
you order and ensure that your order is shipped to you and not to someone else.
We also use cookies to recognize you as a prior customer and to retrieve certain
information previously provided by you, so that you do not need to re-enter this
information every time you shop with us. Personal information you provide to
iParty is stored safely behind firewalls using state-of-the-art technology.

 

What are log files? Are they safe?
Log files are data files where user information is stored. All of this
information is kept confidential. Any information you choose to provide is
stored safely in log files behind firewalls using state-of-the-art technology.
We never share, sell or exchange personal information about our customers with
third parties.

 

What is co-branding?
Co-branding is a way for a Web site to bring other Web sites with complementary
content to the attention of its users. Co-branding is often executed by framing,
which is a method of dividing browser windows. Framing allows us to display the
iParty look and feel while allowing you to browse another site at the same time.
It’s important to note that while you may see the iParty frame, any information
you provide to a co-branding partner is not covered by our privacy policy. Be
sure to check the privacy statements of any third-party Web sites for
information about their use of cookies and personal information they may collect
independently.

 

What information do you collect on the Special Offers page?
On the Special Offers page, we ask for your name and address so that we may mail
you special offers and

 

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promotions. There is space for you to give us additional contact information as
well as demographic information, but only your name and address are required to
receive any mail from iParty. An email address is required if you wish to
receive email offers and iParty.com newsletters.

 

All information that you provide in the “Tell Us About Yourself” section is used
only by iParty to better define our product selection and special offers.

 

Will you sell or exchange my information with a third party?
iParty does not sell or exchange names, or any other information about our
customer, with third parties. Occasionally, we may send special offers to our
customers on behalf of our promotional partners, but we do not sell or exchange
this information with any of our partners. We may also call you about an order
you have placed online, but we do not use or sell numbers for telemarketing
purposes.

 

What about links to other sites?
Some pages on our Web site contain links to other Web sites and occasionally, we
may send a special offer email newsletter with links to our promotional
partners’ Web site. We are careful to link only to reputable companies. The
iParty privacy policy does not extend to third parties. Be sure to check the
privacy statements of any third-party Web sites for information about their use
of cookies and personal information they may collect.

 

How will I know when iParty.com changes its privacy policy?
Our privacy policy is regularly reviewed to make sure we continue to serve the
privacy interests of our customers. We reserve the right to change and update
the privacy policy and these changes will be posted on our Web site. If we make
a change to how we collect, store or share personally identifiable information
we will update the Web site privacy policy accordingly. We encourage you to
visit this page from time to time to ensure you are aware of our any changes we
may have made.

 

Notification of Changes
If at some point there is a change to how we collect, store, or share personally
identifiable information, we will notify you by email of the material changes.
At that time you may choose to opt out of our new policies by sending a message
to an email address that will be provided at that time. You may also visit this
privacy statement for any changes to our policies.

 

How can I update my account information?
You can email us at customercare@iparty.comor write to
4875 White Bear Parkway
White Bear Lake, MN 55110
or you can reach us by telephone at 800-447-2789

 

Please take me off your mailing list.
If, for any reason, you would like to be taken off our email list, please email
customercare@iparty.com.
If you would like to be taken off our print mailing list, please write to
4875 White Bear Parkway
White Bear Lake, MN 55110
or you can reach us by telephone at 800-447-2789

 

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Exhibit B

 

Within 30 days of receipt of your order, you may return for a full refund any
unopened merchandise in new condition with its original packaging and
accessories. Merchandise purchased on iParty.com may only be returned through
the returns department and will not be accepted at iParty Retail Stores.

 

Simply follow these instructions:

 

1.               Wrap the package securely with original packaging material.

 

2.               Include the packing slip. Let us know which items you are
returning and why.

 

3.               Be sure we have your name, address, phone number and email
address. Please add any missing information.

 

4.               For your protection, please send your package via UPS or
Insured Parcel Post. This protects you in case your package is damaged or lost
in transit. Send to:

 

iParty.com
Returns Dept.
4875 White Bear Parkway
White Bear Lake, MN 55110

 

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Exhibit C

 

Agreement

 

THIS AGREEMENT is entered into this 8th day, of July, 2003, by and between
Taymark, Inc., 4875 White Bear Parkway, White Bear Lake MN 55110 (“Company”) and
iParty Corp, 1457 VFW Parkway, West Roxbury, MA  02132 (“Representative”).

 

WHEREAS, the Company is in the business of operating private labeled internet
web sites for the purpose of taking and fulfilling orders for party related
products (the “Service”); and

 

WHEREAS, Representative and Company are parties to a Web Site License Agreement
dated July 8, 2003 (the iParty.com Agreement); and,

 

WHEREAS Representative, is well known in the party products industry and wishes
to act as the Company’s representative to solicit new customers for the Service.

 

NOW, THEREFORE, the parties agree as follows:

 

1 .                                    Engagement.  The Company hereby appoints
Representative to act: (a) as the Company’s exclusive sales representative for
soliciting Paper Warehouse, Inc. and Party America Corporation (the “Exclusive
Customers”) contract with Company for the Service; and (b) as the Company’s
non-exclusive sales representative for soliciting all other entities engaged in
the party products business to contract with the Company for the Service
(“Customers”).  The Representative accepts this appointment and engagement
pursuant to the terms and conditions of this Agreement.

 

2.                                       Exclusivity. During the first twelve
months following execution of this agreement, the Company will not solicit the
Exclusive Customers, nor will it grant to any other individual or entity the
right to serve as a representative of the Company to solicit the Exclusive
Customers to contract with the Company for the Service.  Upon lapse of such
twelve month period, Representative shall no longer have any exclusive customers
but may continue to solicit all Customers, including the former Exclusive
Customers, on a non-exclusive basis.

 

3.                                       Term of Agreement.  The term of this
Agreement shall commence as of the date hereof and shall continue for a period
of one (1) year, unless sooner terminated.  If this Agreement is not terminated,
it shall be automatically renewed for successive one year periods.  No renewal
term of this Agreement shall be construed as being of indefinite duration, but
rather as being for successive one-year terms.  Either party may determine not
to renew this Agreement by providing the other party with written notice thereof
at least 90 days prior to the end of its term or any renewal thereof.

 

4.                                       Activities of Representative.  During
the term of this Agreement, Representative shall represent the Company in
soliciting sales of the Service. Representative shall introduce representatives
of Exclusive Customers and other Customers to Company.  If the Company and a
Customer or an Exclusive Customer enter into an agreement within six months of
such introduction whereby Company makes the Service available to a such Customer
or Exclusive Customer, Representative shall be entitled to a commissions on
sales to patron of such Customers or exclusive Customers as set forth in
paragraph 5.  Representative may also be

 

15

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entitled to a commission on sales if Company and Representative agree in writing
that Representative’s efforts were the procuring cause of the contractual
arrangement between Company and Customer.  Representative shall not, during the
term of this Agreement, sell, offer for sale or otherwise represent any service,
which competes with the Service in the sale of party related products through
the Internet.  Representative acknowledges that the Company may solicit
Customers (including former Exclusive Customers after the expiration of the
exclusivity period in this Agreement) to contract with Company for the Service
and Representative shall not be entitled to any commission on sales to such
Customers. Representative agrees at all times during the term of this Agreement
and any renewals hereof, to use commercially reasonable efforts to market,
promote and support the Service. Representative’s activities on behalf of the
Company shall be limited to soliciting Customers for the Service.

 

5.                                       Compensation of Representative.  As
consideration for the services described herein and following the execution of
the agreement between the company and an Exclusive Customer or Customer, the
Company agrees to pay Representative a monthly commission as set forth herein. 
Company shall pay Commissions to Representative by the last day of each calendar
month for sales made to patrons of Customers or Exclusive Customers (Patrons)
the preceding month.  “Commissions” are equal to Net Sales multiplied by five
(5%) percent.  For purposes of this provision, “Net Sales” means the actual
amounts collected from Patrons placing orders reduced by the amount of any
taxes, shipping or handling charges, rush charges, refunds, credits, and
allowances.  In the event the agreement with the Customer or Exclusive Customer
call for sales to be made using the site established pursuant to the iParty.com
Agreement, Representative shall not be entitled to any commissions on such sales
as provided in the Addendum to the Iparty.com Agreement and the commissions
payable under this paragraph shall be all compensation due to Representative
from Company.

 

6.                                       Role of
Representative.  Representative’s sole relationship with the Company is that of
an independent contractor, according to the terms and provisions of this
Agreement.  Only the Company shall have authority to enter into agreements with
Customers or Exclusive Customers.  The Company shall not make available to
Representative or its employees the fringe benefits available to employees of
the Company, such as health insurance, life insurance, disability insurance,
vacation pay or sick pay.  Representative shall be responsible for its own
worker’s compensation, FICA, unemployment insurance, withholding taxes, etc for
its employees.

 

7.                                       Insurance.  The Representative shall,
at its sole cost and expense, obtain and maintain Comprehensive General
Liability insurance with respect to all aspects of the Representative’s business
and operations, with a minimum liability limit of One Million Dollars
($1,000,000.00).  Such insurance shall be issued by an insurance company or
companies legally authorized to transact business in the State of Minnesota. 
All policies of and for such insurance shall name the Company as an additional
insured thereunder and shall provide for at least thirty (30) days prior written
notice, by certified mail, return receipt requested, to the Company before
cancellation, termination, non-renewal or amendment thereto.  At the request of
the Company, the Representative shall provide the Company such documentation as
shall be necessary to evidence the existence of such insurance.

 

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8.                                       Name and Office.  The Representative
shall conduct business in its own name and shall maintain such offices as shall
be necessary to the performance of the Representative’s obligations under this
Agreement.

 

9.                                       Expenses.  Representative shall be
responsible for all of its own expenses, including without limitation,
advertisement, travel, entertainment, mail, public relations and other expenses
not explicitly agreed to be reimbursed herein.

 

10.                                 Termination.

 

(a)                                  For Cause. This Agreement may be terminated
for any of the following reasons, each of which shall be deemed a termination
“for cause:”

 

(i)                                     Upon the bankruptcy or insolvency of
Representative, or the assignment for the benefit of creditors or similar
disposition of the assets of Representative’s business;

 

(ii)                                  The abandonment of the business by the
Representative;

 

(iii)                               A conviction or a plea of guilty or no
contest to a charge of violating any law relating to Representative’s business,
or the conviction or a plea of guilty or no contest to a charge of violating a
felony which involves moral turpitude;

 

(iv)                              The commission of any act by Representative
which materially impairs the goodwill associated with the Company or the
Company’s trademarks, trade names, service marks, logo types or other commercial
symbol;

 

(v)                                 The failure of Representative to meet the
minimum sales performance criteria established on Exhibit B attached hereto and
incorporated herein (the “Minimum Performance Criteria”); or

 

(vi)                              Company ceases to provide the Service or the
iParty.Com Agreement is terminated;

 

(vii)                           Breach of any provision of this Agreement and
failure to cure such breach within 60 days of written notice of such breach.

 

(b)                                 Procedure for Termination for Cause.  Any
termination pursuant to Paragraph 11 (a) shall be effective immediately upon the
delivery of written notice thereof the Representative; provided, however, that
such termination shall not be effective until and unless all applicable federal
or state laws, rules or regulations shall have been complied with. No past,
present or future act, or failure to act, by the Company shall be, or be deemed
to be, a waiver or modification of the Company’s right to terminate this
Agreement hereunder.

 

(c)                                  Without Cause. Either party may terminate
this Agreement for any reason upon furnishing the other party a written
termination notice at least 90 days in advance of the termination date.

 

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11.                                 Nondisclosure of Confidential Information.

 

(a)                                  Nondisclosure.  Representative acknowledges
that he, she, or it shall have access to certain aspects of Confidential
Information (as hereinafter defined) of the Company. Unless granted written
permission by the Company, Representative agrees not to directly or indirectly
use or disclose Confidential Information for so long as said information retains
the characteristics of Confidential Information as defined herein.

 

(b)                                 Confidential Information.  For purposes of
this Agreement, Confidential Information shall mean all information or
compilations of information that derive independent economic value for not being
generally known or readily ascertainable by proper means, or which the Company
considers confidential. Confidential Information includes, but is not limited
to, trade secrets, customer lists, customer incentive or promotion plans,
business records, price lists, business strategies, sales techniques, marketing
plans, management systems and procedures, computer programs, and the results of
research and development whether complete or in progress.

 

(c)                                  Documents and Tangible Items.  All
documents and tangible items provided to Representative by the Company for use
in connection with this Agreement, which documents in any way discuss or
incorporate Confidential Information, are the property of the Company and shall
be promptly returned to the Company upon termination of this Agreement, or upon
request of the Company, together with all copies, reportings, abstracts, notes
or reproductions of any kind made from or relating to the documents and tangible
items or the information they contain.

 

12.                                 Injunctive Relief.  Representative agrees
that any breach of Paragraph 11 of this Agreement would confer irreparable harm
on the Company, which irreparable harm may not be compensable entirely with
monetary damages.  Representative agrees that injunctive relief is an
appropriate remedy for breach of those provisions of this Agreement.  Such
injunctive relief shall be in addition to and not a limitation of any monetary
relief or other remedies or rights to which the Company is or may be entitled to
in law, in equity, or otherwise.

 

13.                                 Miscellaneous Provisions.

 

(a)                                  Modifications.  Except for the iParty.com
Agreement referred to herein, this Agreement supersedes all prior agreements and
understandings between the parties, and it may not be changed or terminated
orally.  No amendment, modification, termination or attempted waiver of any of
the provisions hereof shall be valid unless in writing signed by both parties
hereto.

 

(b)                                 Notices.  All notices or other
communications including Termination Notices, from either of the parties hereto
to the other shall be in writing and shall be considered to be duly delivered or
served three business days following the date when sent by first class,
certified mail, return receipt requested, postage prepaid to the party at its
address as set forth at the beginning of this agreement or to such other address
as such party may hereafter designate by written notice to the other party, or
when received if sent by some other method.

 

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(c)                                  Severability of Provisions.  Should any
provision of this Agreement be unenforceable under then applicable law, or be
declared invalid through arbitration or by a court of competent jurisdiction for
any reason, such provision, or invalidity thereof, shall not affect the validity
of any remaining provision of this Agreement which shall remain in full force
and effect as if this Agreement had been executed with the invalid unenforceable
provision eliminated.

 

(d)                                 Counterparts.  This Agreement may be
executed in any number of counterparts, each of which shall be deemed an
original, but all of which shall constitute one and the same instrument.

 

(e)                                  Survival of Terms and Conditions.  The
terms and conditions of this Agreement shall survive the expiration or
termination of this Agreement to the full extent necessary for their enforcement
and for the protection of the party for whose benefit they operate.

 

(f)                                    Effect of Headings.  The subject headings
of the paragraphs of this Agreement are included for purposes of convenience
only and shall not effect the construction or interpretation of any of its
provisions.

 

(g)                                 Governing Law.  This Agreement shall be
governed by and construed in accordance with the laws of the State of
Minnesota.  Any and all causes of action, claims, suits or demands arising from
or related to the terms of this Agreement or the relationship of the Company and
the Representative hereunder shall be brought in federal or state courts located
in the State of Minnesota.  The Representative hereby consents and submits to
the jurisdiction of said courts and agrees that service of process may be made
by publication, by registered or certified mail, or in any manner provided under
Minnesota or applicable Federal law.

 

(h)                                 Assignment.  Representative may not assign
its interest under this Agreement without the express written consent of the
Company.

 

IN WITNESS WHEREOF, the parties have executed this Agreement the day and year
first above written.

 

COMPANY: TAYMARK, INC.

REPRESENTATIVE: IPARTY CORP.

 

 

 

 

BY:

 

 

BY:

 

JOHATHON STARUCK, GENERAL MANAGER

NAME:  PATRICK FARRELL, PRESIDENT

 

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Schedule I

Licensed Intellectual Property

 

Marks

 

U.S. Registration or
Serial No.’s

 

 

 

 

 

IPARTY.COM

 

2649801 and
76139874

 

 

 

 

 

IPARTY

 

756946649

 

 

WEB PAGE CONTENT

 

Articles

Party Tips

Product Descriptions

Basic Shop

Gateways

Site layout, design and navigation know-how

Site look and feel

 

WEB PAGE SOFTWARE

 

Database Structure

Product Hierarchy

 

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Schedule II

 

INTELLECTUAL PROPERTY – ADDITIONAL LICENSE

 

WEB PAGE CONTENT

 

Product Descriptions

Basic Shop

Site Layout, design and navigation know-how

 

WEB PAGE SOFTWARE

 

Database Structure

Product Hierarchy

 

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Schedule III

 

Web Site Functionalities and Features

 

a.                                       Site Functionality

 

Site Layout

Drop down menus

Right nav – Shop a la carte

Cross selling

Gateways – Halloween, Parrot Head

Basic Shop

 

b.                                      Services on Site

 

Browse and order goods

Browse content

Sign up for Special offers

Store Info

Track orders

Enter coupon codes

Jobs section

Investor relation section

Send email to CustomerCare@
Gurus@
Corporate@
Privacy@
Jobs@
Remove@

Link to Margaritaville.com

 

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