**Exhibit 10.1**

 

**Web Site License Agreement**

 

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

 

**Recitals:****                             **Taymarkhas developed and operates a proprietary method of doing business that includescomputer software, a goods catalogue for products and an HTML template wherebycustomers can order party related products over the World Wide Web portion ofthe Internet (the “System”).

 

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

 

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

 

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

 

**Definitions:**

 

**a.****                                       “LicensedIntellectual Property”** shall mean iParty’s proprietary rights, includingwithout limitation, trade marks, trade secrets, copyrights, know how, andpatents, in and to the items set forth on Schedule 1 hereto. “LicensedIntellectual 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 wereknown by or used by Taymark prior to the date hereof.

 

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

 

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

 

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

 

**e.****                                       “CustomerData”**shall mean personally identifying data collected from Customers.

 

**f.****                                         “PrivacyPolicy”**shall mean the iParty’s privacy policy, a copy of which is attachedhereto as Exhibit A and amended to conform to this agreement including section1.4

 

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

 

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

 

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

 

**1.**                                      **Web Site License.**

 

**1.1****                               License.  **During the effective term of this Agreement, iPartygrants Taymark a license, subject to the terms and conditions set forth herein,to use the Licensed Intellectual Property in connection with the operation ofthe 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 thecontent provided by iParty as part of the Web Site, as appropriate inassociation with offering Customers access to the Web Site and the Goods.iParty grants to Taymark a non-exclusive right to use the Licensed IntellectualProperty solely in connection with the operation of the Web Site, advertisingtherefore and performance of its duties hereunder. iParty grants to Taymark anexclusive right to use the name “iParty.com” and the URL “www.iParty.com” inconnection with the operation of the Web Site, and performance of its dutieshereunder.

 

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

 

**1.3****                               Ownership of Intellectual Property.**  Nothingin this Agreement shall be construed to create ownership rights on the part ofeither party to any of the intellectual property belonging to the other party,any derivative works created there from, any variations thereof ormodifications thereto.  All suchintellectual property shall be and remain the exclusive property of itsrespective owner.

 

**1.4****                               CustomerData.**  iParty shall own all information and data related toCustomers that is collected in connection with Customers’ activities throughthe Web Site, regardless of the nature of the information and data, or wheresuch information and data is maintained (“Customer Data”). iParty grants toTaymark a non-assignable, non-transferable, non-exclusive right and license touse Customer Data solely in connection with the operation of the Web Site andfulfilling its obligations under this Agreement, and for no other purposeswhatsoever.  iParty specifically retainsall right, title and interest in and to such Customer Data, except for thelimited license rights granted hereunder. Upon request, Taymark shall promptlyand 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 withrespect to Customers who visit, browse and make purchases on the Web Site,provided that Taymark shall be under no obligation to independently verify theaccuracy of the Customer inputted information it collects.  During the Term, Taymark shall maintainCustomer Data for as long as commercially necessary to perform its obligationsunder this Agreement and meet its internal business needs and requirements inaccordance with its standard record retention policies.  Upon termination of this Agreement, Taymarkshall promptly turn over to iParty all copies of Customer Data, except thatTaymark may retain Customer Data necessary to maintain the record keepingrequirements of paragraph 1.7, below and as may be required to be kept inaccordance with normal business practices. The term “Customer Data” shallnot include information about persons gathered from sources other than the WebSite, even though such persons may also be customers of the Web Site.

 

**1.5****                               Additional License.**  Inaddition to the license rights set forth in Section 1.1, above, iPartygrants Taymark a non-exclusive, non-assignable, non-transferable, License touse certain of the Licensed Intellectual Property, expressly limited to thoseitems of intellectual property set forth on Schedule II hereto, solely inconnection with the operation of other internet web sites owned and operated byTaymark.  The license granted in thisSection 1.5 shall survive the termination or expiration of this Agreementunless this Agreement is terminated pursuant to Section 7.3 hereof due tothe default or material breach of Taymark.

 

**1.6****                              ****Royalties.**  Taymarkshall pay all Royalties due to iParty by either electronic funds transfer to anaccount designated by iParty or by delivering a check to iParty, in eitherevent, no later than the twenty-first (21st) day of each calendarmonth for sales of Goods made through the Web Site (and the telephone order numberposted on the Web Site) the preceding month. Taymark will also at the same timeprovide iParty with a summary report of all sales and related activity for thepreceding month.  “Royalties” are equalto Net Sales multiplied by fifteen (15%) percent. For purposes of thisprovision, “Net Sales” means the actual amounts collected from Customersplacing orders via the Web Site (and the telephone order number posted on theWeb Site) reduced by the amount of any taxes, shipping or handling charges,rush charges, refunds, credits, and allowances.

 

**1.7****                               Taymark’sRecords.  **During the term of this Agreement, Taymark shall keepand maintain in accordance with its normal business practices at its primaryU.S. place of business books and records of all business transacted by Taymarkin connection with the Web Site and the Licensed Marks for such period asrequired 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 theLicensed Marks shall be maintained in such a manner that Taymark can generatereports and records of such sales, separate from Taymark’s accounting recordsrelating to other items distributed or sold by Taymark.  iParty, or its duly authorized agents orrepresentatives who shall be members of a nationally recognized firm ofcertified public accountants, shall have the right at its own expense,exercisable once in any twelve (12) month period, to inspect said books andrecords at Taymark’s premises during regular business hours, provided thatiParty shall give to Taymark at least thirty (30) days’ prior notice of itsintention to do so, and provided further that iParty’s inspection rights mayrelate to periods up to two (2) years prior to the date of suchexamination.  All individuals to who mayhave access to Taymark’s books and records must sign a confidentialityagreement on Taymark’s standard form.

 

**2.**                                      **Web SiteFunctionality and Operation.**

 

**2.1****                               Lookand Feel.**  The partiesagree that the Web Site operated by Taymark shall, to the extent that it iscommercially and technically feasible to do so, incorporate the appearance,features and functionalities of the iParty.com Web Site presently operated byiParty.  At a minimum, the Web Site willinclude the functionalities and features set forth on Schedule III.

 

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

 

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unreasonably withheld.  Allchanges to the Privacy Policy must be approved by iParty in writing prior totheir implementation.  Taymark shallundertake commercially reasonable security measures to prevent unauthorizedaccess to, and use of, and maintain the security, confidentiality and integrityof, the Web Site.  Such measures shallinclude, 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 utilizeSecure Socket Layer (“SSL”) encryption when processing orders and acceptingCustomers’ personal and credit card information and shall apply for and obtainan SSL certificate from Verisign or another mutually acceptable establishedencryption key vendor .  Taymark willalso operate the Web Site in compliance with the requirements of the Children’sOnline Privacy Protection Act.  Taymarkwill implement and follow the policies and procedures set forth in the Privacyand Security Statement issued by Taymark and James Tower.

 

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

 

**2.4****                               Exclusivity.  **Taymarkmay use the Licensed Intellectual Property only for the purposes set forth inthis Agreement to permit Customers to browse the Web Site and to place orderswith Taymark for fulfillment by Taymark and otherwise as set forth inSection 1.5 hereof.  In no eventshall Taymark be permitted to use the Licensed Intellectual Property for anyother purpose.

 

**2.5****                               iParty’sAdditional 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’scorporate and investor relations information. iParty, or a third-party designated by iParty, will host and provide thecontent for the “Investor Relations” page and will be responsible formaintaining and updating the information contained on it.  Subject to Taymark’s approval, which may notbe unreasonably withheld, iParty may link other materials to the Web Site andlink to the Web Site from existing and future Web sites owned or controlled byiParty, or its affiliates.  Taymark willinclude 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 thispage and will be responsible for updating it.

 

**2.6****                               E-Mailand URL Hosting.  **During the term of this Agreement, iParty willcontinue to host the “iParty.com” URL on a domain server (the “iParty Server”)of its choice.  iParty will cause hitsto the iParty.com domain to be directed away from the iParty Server to anInternet Protocol address associated with the Web Site and designated byiParty.  Subject to the terms andconditions of this Agreement, and the license granted herein, Taymark mayconfigure the Web Site so that Web Site content is displayed within a Web pageframe showing the www.iParty.com URL and located on the iParty Server.  During the term of this Agreement, iPartywill maintain e-mail service associated with the iParty.com URL through a POP3or equivalent server.  iParty shallconfigure the POP3 server so that e-mail to the customercare@iParty.com;gurus@iParty.com; remove@iParty.com; and privacy@iParty.com addresses, will beforwarded to a POP3 server designated and accessed by Taymark.

 

**2.7.****                            Availabilityof Web Site.**  Taymark shall use commercially reasonable effortsto 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 andcomplete orders placed by Customers on the Web Site..

 

**2.8****                               Approvalby iParty.**  iParty shall have the right to exercise itscommercially reasonable approval of the concept for the Web Site and allcontent to be included on the Web Site by Taymark.  The layout, design and content of the Web Site shall initially beprovided 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 WebSite shall require iParty’s express prior written approval.  Provided, however, that Taymark may updatethe content of the site from time to time to reflect new Goods offerings,sales, promotions and other marketing efforts of Taymark without such priorwritten approval from iParty.  Taymarkshall not permit the site to contain any pornographic, obscene or offensivematerial or content that reflects negatively on the Licensed Marks.

 

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**2.9**                               Taymarkmay modify the Web Site as required by applicable law if Taymark, in itsreasonable discretion, determines such modifications are necessary.

 

**3.**                                      **Prices andGoods Catalogue.**

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**3.1****                               RetailPrices.  **The Web Site will be configured to include Taymark’sonline Goods Catalogue and Taymark’s retail price to the Customers for thegoods.  Taymark will endeavor toestablish prices for the Goods that are, on an overall basis, competitive withthe usual and customary retail price for Goods charged by other internet basedretail party goods businesses, excluding any sale or promotional items.

 

**3.2****                               GoodsCatalogue.**Taymark reserves the right, in its sole discretion and withoutincurring any liability to iParty or Customers, to:  (a) alter the specifications for any products in the GoodsCatalogue; (b) discontinue the manufacture or availability of any products in theGoods Catalogue; (c) discontinue the development of any new product, whether ornot such product has been announced publicly or is included in the GoodsCatalogue; or (d) commence the manufacture and sale of new products havingfeatures which make any product in the Goods Catalogue wholly or partiallyobsolete, whether or not iParty is granted any distribution rights in respectof such new products.  Notwithstandingthe above, Taymark shall provide iParty with notice of such decisions and shallfill all accepted purchase orders from the Customers for any such altered ordiscontinued products of which manufacturing and commercial deliveries havecommenced.  Taymark shall provide iPartywith a report identifying all of the items contained in the Goods Catalogue ona quarterly basis.  iParty shall havethe right to review and inspect the products from the Goods Catalogue offeredon the Web Site to Customers once in any calendar quarter.  The purpose of this review and inspection isto allow iParty to ensure that the quality and selection of products offered onthe Web Site do not damage the Licensed Marks or the goodwill associatedtherewith.  As part of this review,iParty shall have the right to have products removed from the selection ofproducts offered on the Web Site. iParty shall have the right to request thatproducts be added to the Goods Catalogue, including without limitation productssourced through third party vendors, and Taymark will reasonably consider alsuch requests.  If iParty requests that certainproducts be added to the Goods Catalogue and Taymark declines to do so, iPartymay guarantee in writing a commercially reasonable amount of sales for thoseproducts, purchase; the inventory for Taymark or take such other steps as itmay find appropriate.  In that event,Taymark may add such products to the Goods Catalogue if it believes it iscommercially reasonable to do so.

 

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

 

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

 

**3.5****                               Advertising.  **Neitherparty 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 theevent the parties agree to place any advertising on the Web Site, the partiesshall also agree on the division of revenues.

 

**4.****                                      CustomerTransactions.**

 

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

 

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

 

**4.2****                               Shipmentof Goods.  **Taymark shall ship each order which Taymark accepts asspecified by the respective Customer to****the Customer’sdesignated point of delivery submitted with the order. Taymark may only deliverto addresses within the United States, U. S Virgin Islands, and Canada. Taymarkwill also ship to APO and FPO addresses. Taymark will use commerciallyreasonable efforts to fill and ship orders in a timely fashion or in the timeframe indicated by the Web Site. Taymark may reject orders with incompleteorder information, incomplete shipping information or for shipment outside theUnited States, U. S Virgin Islands, and Canada.

 

**4.3****                               Fulfillment.**  Taymarkwill use commercially reasonable efforts to: (a) maintain sufficient inventoryto fulfill Customer orders; and (b) meet the following shipping goals set forthbelow:

 

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

 

**4.3.2****                     Priority.**  ”PriorityOrders” means Orders shipped domestically or internationally via overnight ortwo-day carrier.  Priority Orders forwhich credit approval has been received by Taymark on any Business Day before12:00 Noon, Central Time will be shipped on the same day.  Priority Orders for which credit approval isreceived after 12:00 Noon, Central Time on any Business Day, or at any time onany day which is not a Business Day, will be shipped on the following BusinessDay.  Taymark may charge added shippingand handling charges for such Priority Orders.

 

**5.****                                      CustomerService and Returns.**

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**5.1****                              **Customerservice and returns will be processed through the Web Site by linking to a pagewhich Taymark will identify as the “Customer Service Contact”.  iParty shall notify Taymark as soon aspossible after receipt of products by iParty or its Customer of any complaintwhatsoever iParty or its Customer may have concerning such products. CustomerReturns will be handled in accordance with return policy set forth on ScheduleB.

 

**6.**                                      **Taxation.**

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**6.1**                               Taymarkshall collect sales taxes within such jurisdictions as Taymark has a legalobligation to do so.  iParty and therespective Customer may be liable for sales, use or other taxes which are notcollected by Taymark.  Each party shallindemnify, defend and hold the other party harmless with respect to any claimsarising 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 andTermination.**

 

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

 

**7.2**                               Eitherparty may terminate this Agreement upon 180 days notice without cause.

 

**7.3****                              **Eitherparty may immediately terminate this Agreement for cause at any time uponwritten notice to the other Party in the event of the occurrence of one or moreof the following events: (i) if a petition under any foreign, state, or UnitedStates bankruptcy act, receivership statute, or the like, as they now exist, oras they may be amended, is filed by the other party; or (ii) if such a petitionis filed by any third party, or an application for a receiver of the otherparty is made by anyone, and such petition or application is not resolvedfavorably by such party within 90 days; or (iii) the other party materiallybreaches any of its representations, warranties, obligations or agreementshereunder, and such breach, if capable of being cured, is not cured within 60days following receipt of written notice of such breach from the non-breachingparty.

 

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**7.4**                               **TransitionPeriod.  **Duringthe Transition Period, Taymark will continue to accept and fill Customer ordersout of its regular inventory.  IfLicensee reasonably expects that it will not be able to meet Customer demandfor certain Goods from its inventory during the Transition Period, thenLicensee shall provide Licensor with a description of such Goods.  iParty may offer to guarantee in writing acommercially reasonable amount of sales for those Goods, purchase the Goods forTaymark, or take such other steps as it may find appropriate. Taymark mayaccept such offer if it believes it is commercially reasonable to do so. Duringthe Transition Period, Taymark shall cooperate with iParty with respect to thetransfer and return the Licensed Intellectual Property to iParty or itsdesignee; the transfer of the www.iParty.com URL to Taymark; and theestablishment by iParty or its designee of a successor Web site located at theURL with a minimum of disruption and inconvenience to Customers.

 

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

 

**7.6****                               NoFurther Compensation.**  In the event either party terminates thisAgreement in accordance with the terms hereof, the parties hereby agree that,without prejudice to any other remedies which either party may have in respectof any breach of this Agreement, neither party shall be entitled to anycompensation, reimbursement or like payment from the other solely as a resultof such termination.

 

**8.**                                      **ConfidentialInformation.**

 

**8.1****                               “ConfidentialInformation”**  means all non-publicinformation and ideas, including, but not limited to, information regarding aparty’s business, financial condition, operations, products, services orfinances, disclosed by such party (either orally or in writing) to the otherparty.  Taymark and iParty may havepreviously exchanged and may exchange certain Confidential Information relatingto the development and implementation of the Web Site, the design thereof, andany modification thereof.  It is theintention of Taymark and iParty that this information shall be used by theother party solely for the purpose of implementing and operating the Web Siteand for no other purpose.  Each partyshall endeavor to designate any information or ideas it communicates to theother party which it, in good faith, believes constitutes “ConfidentialInformation” by marking it as Confidential. Such designation is for informationalpurposes only and the designation, or lack thereof, is not determinative of theconfidential nature of the information.

 

**8.2****                               Non-Disclosure.**  Noparty and no representative of a party shall disclose to any other person oruse the Confidential Information without the prior written consent of the otherparty.  In addition, without the priorwritten consent of the other party, no party and no representative of a partyshall disclose to any other person the fact that Confidential Information hasbeen made available.

 

**8.3****                               Returnof Confidential Information.**  In the event that this Agreement isterminated or otherwise expires, no party and no representative of a partyshall use, for any purpose, any of the Confidential Information now orhereafter received or obtained from the other party or its Representatives. AllConfidential Information (and all copies, summaries, and notes or the contentsor 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 otherparty or its representatives in any form or for any reason.

 

**8.4****                               Exclusions.**  Aparty or its representative may retain, disclose or otherwise use ConfidentialInformation to the extent that such Confidential Information (a) shallhave been made public other than through acts of, or attributable to, suchparty or its Representatives in violation of this Agreement; (b) isrequired to be disclosed by law; or (c) has been independently developedby such party or its Representatives without violating any obligations underthis Agreement.  If any governmentalagency or any third party shall seek in any way to discover or otherwise gainaccess to, or production of (“Discovery”) any Confidential Information or anyother data or records of one party that may be in the possession of the otherparty, the other party shall immediately notify the first party and shall, atthe first party’s written request and at the first party’s expense, oppose suchDiscovery, and cooperate with the first party in the first party’s efforts topreclude,

 

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quash, limit or impose protective orders or similar restrictions onsuch Discovery.

 

**9.**                                      **iParty’sWarranties.**

 

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

 

**9.2**                               iParty represents andwarrants that the Licensed Intellectual Property, the Content and anyadditional content posted on the Web Site by or at iParty’s direction doesnot:  (I) violate or infringe anytrademark, trade dress, or copyright; (II) constitute a libel or defamation ofor an invasion of the rights of privacy or publicity of any person, firm orcorporation or violate any other right, title or interest of any other person,firm or corporation; (III) violate any law or regulation; or (IV) containmaterially false, inaccurate or misleading information.

 

**10.****                               Taymark’sWarranties.**

 

**10.1**                        Taymark represents and warrants that theSystem and any materials (other than the Licensed Intellectual Property,Content or additional content provided by iParty) used in connection with theoperation of the Web Site or posted on the Web Site by or at Taymark’sdirection does not:  (I) violate orinfringe any trademark, trade dress, or copyright; (II) constitute a libel ordefamation of, or an invasion of the rights of privacy or publicity of anyperson, firm or corporation or violate any other right, title or interest ofany 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.**  iPartyshall indemnify, defend, and hold harmless Taymark, its parent, divisions,subsidiaries, affiliates, directors, officers, employees and agents, and defendany action brought against the same with respect to any claim, demand, cause ofaction, debt or liability, including reasonable attorneys’ fees, to the extentthat the same is based upon a claim that: (i) if true, would constitute abreach of any of iParty’s representations, warranties, or obligationshereunder; (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 therequest of iParty or the Licensed Intellectual Property, or any portionthereof, infringes or violates any patents, copyrights, trade names, tradesecrets, licenses, or other proprietary rights of any third party.

 

**11.2****                        TaymarkIndemnification.**  Taymark shall indemnify, defend, and holdharmless iParty, its parent, divisions, subsidiaries, affiliates, directors,officers, employees and agents, and defend any action brought against the samewith respect to any claim, demand, cause of action, debt or liability,including reasonable attorneys’ fees, to the extent that the same is based upona claim that: (i) if true, would constitute a breach of any of Taymark’srepresentations, warranties, or obligations hereunder; (ii) arises out of thenegligence or willful misconduct of Taymark; (iii) arises out of or in any wayrelates to any of the Products, or the use thereof, sold to Customers throughthe Web Site; and (iv) the operation or content of the Web Site or any portionthereof, or the System or any portion thereof, but in any event excluding theLicensed Intellectual Property, Content and any additional content provided byiParty, infringes or violates any patents, copyrights, trade names, tradesecrets, licenses, or other proprietary rights of any third party.

 

**11.3****                        Insurance.  **Infurtherance of Taymark’s covenants contained in the preceding subparagraph,each party agrees to carry general commercial liability insurance with aminimum limit of liability of at least Five Million Dollars ($5,000,000) peroccurrence and the other party shall be named as an additional insured partytherein.  A certificate evidencing theexistence of such insurance policy shall be delivered within thirty (30) daysof the execution of this Agreement.

 

**12.**                               **Limitationson Liability.**

 

**12.1**                        IN NOEVENT SHALL EITHER PARTY OR THEIR RESPECTIVE DIRECTORS, OFFICERS, PARENT COMPANIES,AND AFFILIATES, LICENSEES AND SUPPLIERS, BE LIABLE FOR ANY LOST DATA ORCONTENT, 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 IFADVISED TO THE POSSIBILITY OF SUCH DAMAGES, AND NOTWITHSTANDING THE FAILURE OFESSENTIAL PURPOSE OF ANY LIMITED REMEDY.

 

**13.**                               **GeneralProvisions.**

 

**13.1****                        ForceMajeure.**  In the event that either party is unable to perform anyof its obligations under this Agreement or to enjoy any of its benefits becauseof any event beyond the control of the affected party including, but notlimited to, natural disaster, acts of God, actions or decrees of governmentalbodies or failure of communication lines, but excluding employee strikes or ashortage of supplies or personnel (an “Event”), the party who has been soaffected shall promptly give written notice to the other party and shall useits best efforts to resume performance. Upon receipt of such notice, all obligations under this agreement shallbe immediately suspended for the duration of such Force Majeure Event.

 

**13.2**                        **Notice.  **Allnotices, demands, requests or other communications required or permitted underthis Agreement will be deemed given when (i) delivered personally; (ii) five(5) days after having been sent by registered or certified mail, return receiptrequested, postage prepaid; or (iii) one (1) business day after deposit with acommercial overnight carrier, with written verification of receipt, unlessotherwise 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.  **Waiverof any breach, or failure to enforce any term of this Agreement shall not bedeemed a waiver of any breach or right to enforce which may thereafteroccur.  No waiver shall be valid againstany party hereto unless made in writing and signed by the party against whomenforcement of such waiver is sought and then only to the extent expresslyspecified herein.

 

**13.4**                        **Severability.  **Inthe event any one or more of the provisions of this Agreement shall for anyreason be held to be invalid, illegal or unenforceable, the remainingprovisions of this Agreement shall be unimpaired and the parties willsubstitute a new enforceable provision of like economic intent and effect.

 

**13.5**                        **ApplicableLaw.  **This Agreement, the rights and obligations of theparties hereto, and any claims or disputes thereto, shall be governed by andconstrued in accordance with the laws of the State of Minnesota withoutreference to conflict of law principles.

 

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

 

**13.7****                        Compliance with Laws.**  Each Party shall comply with allapplicable international, national, state, regional and local laws andregulations, and industry customs in conducting business and performing itsobligations hereunder.

 

**13.8**                        **Assignment.  **Neitherparty shall have the right to assign this Agreement without the prior writtenconsent of the other party.  Thetransfer of a majority of the capital stock or substantially all of the assetsof a party or a change in actual control of a party shall be deemed anassignment for the purposes of this section and any purported assignmentwithout the other party’s consent shall be void and shall be a breach of thisAgreement. A party shall not unreasonably withhold consent to an assignmentprovided that the assignee meets the non-assigning party’s standards for creditworthiness, business acumen, reputation, morality and all other factors deemedrelevant by the non-assigning party. The potential assigning party and thepotential assignee shall provide the non-assigning party all informationreasonably requested by it relevant to its determination.

 

**13.9**                        **InitialAttempt to Resolve Dispute.  **In the event of any disputeor disagreement between the parties either in interpreting any provision ofthis Agreement or about the performance of either party, then upon the writtenrequest of either party, each of the parties will appoint a designatedrepresentative to resolve such dispute or disagreement. The designatedrepresentatives will discuss the problem and negotiate in good faith in aneffort to resolve the dispute without any formal proceeding. During the courseof such negotiation(s), all reasonable requests made by one party to the otherfor information, including copies of relevant documents, shall be 

 

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

 

**13.10****                 Mediationand Arbitration of Dispute.  **Except for the right of either partyto apply to a court of competent jurisdiction for a temporary restrainingorder, preliminary injunction or any other equitable relief to preserve thestatus quo or prevent irreparable harm pending the selection and confirmationof a panel of arbitrators, any dispute arising under this Agreement that cannotbe resolved as set forth in Section 13.9 above shall be resolved through amediation-arbitration approach. The parties agree to first try to resolve thedispute informally with the help of a mutually agreed-upon third partymediator. If it proves impossible to arrive at a mutually satisfactory solutionthrough mediation, the parties agree to submit their dispute to bindingarbitration in Minneapolis Minnesota in accordance with the CommercialArbitration Rules of the American Arbitration Association, except as modifiedherein.  The arbitration may beconducted by one impartial arbitrator by mutual agreement or by threearbitrators if the parties are unable to agree on a single arbitrator within 30days of first demand for arbitration. All arbitrators are to be selected from apanel provided by the American Arbitration Association.  Upon request of a party, the arbitratorsshall have the authority to permit discovery to the extent they deemappropriate. A court reporter shall record the arbitration hearing and thereporter’s transcript shall be the official transcript of the proceeding. Thearbitrators shall have no power to add or detract from the agreements of theparties and may not make any ruling or award that does not conform to the termsand conditions of this Agreement. The arbitrators shall have the authority togrant injunctive relief in a form substantially similar to that which wouldotherwise be granted by a court of law. The arbitrators shall have no authorityto award punitive damages or any other damages not measured by the prevailingparty’s actual damages. The arbitrators shall specify the basis for any damageaward and the types of damages awarded. The decision of the arbitrators shallbe final and binding on the parties and may be entered and enforced in anycourt of competent jurisdiction by either party.  The prevailing party in the arbitration proceedings shall beawarded reasonable attorneys’ fees, expert witness costs and expenses, and allother costs and expenses incurred directly or indirectly in connection with theproceedings, unless the arbitrators shall for good cause determineotherwise.  Neither party nor thearbitrators may disclose the existence, content, or results of any arbitrationhereunder without the prior written consent of both parties or except asrequired by law, regulations promulgated thereunder, reporting requirements ofand to the Securities and Exchange Commission, or court order.

 

**13.11****                 FurtherAssurances.  **Each of the parties hereto agrees to take or causeto be taken such further actions, to execute, deliver and file or cause to beexecuted, delivered and filed such further documents, and will obtain suchconsents, as may be necessary or as may be reasonably requested in order tofully effectuate the purposes, terms and conditions of this Agreement.

 

**13.12****                 Section Headings.  **Section headingscontained in this Agreement are inserted for convenience or reference only andshall not in any way limit or affect the meaning, construction or scope of anyof the provisions hereof.

 

**13.13****                 Counterparts.  **ThisAgreement may be executed in several counterparts, each of which shall bedeemed to be an original, and all of which, when taken together, shallconstitute one and the same instrument.

 

**13.14****                 Relationshipof the Parties.  **The relationship of the parties hereunder shallbe that of independent contractors. Nothing herein shall be construed to constitute a partnership between orjoint venture of the parties, nor shall either party be deemed the agent of theother or have the right to bind the other in any way without the prior writtenconsent of the other.

 

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

 

**13.16****                 Jurisdiction.  **Subjectthe provisions of Section 13.10; all disputes arising out of or relatingto

 

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this Agreement shall be submitted to the non-exclusive jurisdiction ofthe state and federal courts in the State of Minnesota, and each partyirrevocably consents to such personal jurisdiction and waives all objectionsthereto.

 

**13.17**                 **Survival ofProvisions.**  In the event of any termination of thisAgreement, 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 bespecified in the Agreement, are intended to continue and survive and shall socontinue and survive beyond the termination of this Agreement.

 

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

 

**13.19****                 EntireAgreement.  **This Agreement and the Exhibits and Schedulesattached hereto, constitute the entire understanding and contract between theparties and supersedes any and all prior or contemporaneous oral and writtencommunications regarding the subject matter, all of which communications aremerged herein.  It is expressly understoodand agreed that no employee, agent or other representative of Taymark has anyauthority to bind Taymark as to any statement, representation, warranty orother expression unless the statement, representation, warranty or otherexpression is specifically included within the express terms of thisAgreement.  This Agreement shall not bemodified, amended or in any way altered except by an instrument in writingsigned by both of the parties.

 

**IN WITNESS WHEREOF,**this Agreement has been executed by or on behalf of each of the parties heretoas 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 toprotecting the privacy of our customers, though we make every effort topreserve user privacy, we may need to disclose personal information whenrequired by law wherein we have a good-faith belief that such action isnecessary to comply with a current judicial proceeding, a court order or legalprocess served on our Web site.

 

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

 

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

**Is it safe to makeonline purchases from iParty.com?**Yes. We havemade data security a priority. When a purchase is made or when personalinformation is provided to us, we use Secure Sockets Layer (SSL) technology toensure that your information is encrypted. This means that no one else can readit while it is being transmitted over the Internet. SSL is regarded as theindustry standard among encryption technologies. It is among the best softwareavailable today for secure commerce transactions.

 

**What do you do withmy information?**Simply put,we use your information to serve you better. iParty is committed to qualitycustomer experience. For customers who make a purchase at iParty.com, we recordwhich pages you visited and any other information volunteered during theordering and registration process. All of this information is keptconfidential. We aggregate this data anonymously to analyze how people use oursite and to learn how we can improve their shopping experience. We may also usethe information we collect to notify you about important functionality changesto the Web site, new iParty services and special offers we think you’ll findvaluable. This may also include special offers, information on upcoming retailstore promotions and other marketing related information for the iParty.com Website, retail stores and/or on behalf of our carefully selected promotionalpartners. For customers only browsing iParty.com, our site automaticallyrecognizes your Internet service provider, but cannot identify you as anindividual.

 

**What are cookies andhow are they used?**To optimizeyour 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 harddrive. Some of them expire after a set period of time. Others expire as soon asyou close your browser. Cookies help us keep track of items you order andensure that your order is shipped to you and not to someone else. We also usecookies to recognize you as a prior customer and to retrieve certaininformation previously provided by you, so that you do not need to re-enterthis information every time you shop with us. Personal information you provideto iParty is stored safely behind firewalls using state-of-the-art technology.

 

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

 

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

** **

**What information doyou collect on the Special Offers page?**On theSpecial Offers page, we ask for your name and address so that we may mail youspecial offers and

 

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promotions. There is space for you to give usadditional contact information as well as demographic information, but onlyyour name and address are required to receive any mail from iParty. An emailaddress is required if you wish to receive email offers and iParty.comnewsletters.

 

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

 

**Will you sell orexchange my information with a third party?**iParty doesnot sell or exchange names, or any other information about our customer, withthird parties. Occasionally, we may send special offers to our customers onbehalf of our promotional partners, but we do not sell or exchange thisinformation with any of our partners. We may also call you about an order youhave placed online, but we do not use or sell numbers for telemarketingpurposes.

 

**What about links toother sites?**Some pages onour Web site contain links to other Web sites and occasionally, we may send aspecial offer email newsletter with links to our promotional partners’ Website. We are careful to link only to reputable companies. The iParty privacypolicy does not extend to third parties. Be sure to check the privacystatements of any third-party Web sites for information about their use ofcookies and personal information they may collect.

 

**How will I know wheniParty.com changes its privacy policy?**Our privacypolicy is regularly reviewed to make sure we continue to serve the privacyinterests of our customers. We reserve the right to change and update theprivacy policy and these changes will be posted on our Web site. If we make achange to how we collect, store or share personally identifiable information wewill update the Web site privacy policy accordingly. We encourage you to visitthis page from time to time to ensure you are aware of our any changes we mayhave made.

 

**Notification ofChanges**If at somepoint there is a change to how we collect, store, or share personallyidentifiable 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 messageto an email address that will be provided at that time. You may also visit thisprivacy statement for any changes to our policies.

 

**How can I update myaccount information?**You can emailus at customercare@iparty.comor write to4875 White Bear ParkwayWhite Bear Lake, MN 55110or you can reach us by telephone at 800-447-2789

 

**Please take me offyour mailing list.**If, for any reason, you would like to be taken off our email list, please emailcustomercare@iparty.com.If you would like to be taken off our print mailing list, please write to4875 White Bear ParkwayWhite Bear Lake, MN 55110or you can reach us by telephone at 800-447-2789

 

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Exhibit B

 

Within30 days of receipt of your order, you may return for a full refund any unopenedmerchandise in new condition with its original packaging and accessories.Merchandise purchased on iParty.com may only be returned through the returnsdepartment and will not be accepted at iParty Retail Stores.

 

Simplyfollow these instructions:

 

1.               Wrapthe package securely with original packaging material.

 

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

 

3.               Besure we have your name, address, phone number and email address. Please add anymissing information.

 

4.               Foryour protection, please send your package via UPS or Insured Parcel Post. Thisprotects 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 8thday, of July, 2003, by and between Taymark, Inc., 4875 White Bear Parkway,White Bear Lake MN 55110 (“Company”) and iParty Corp, 1457 VFW Parkway, WestRoxbury, MA  02132 (“Representative”).

 

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

 

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

 

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

 

NOW, THEREFORE, the parties agree as follows:

 

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

 

2.                                       Exclusivity. During the first twelve months following execution of thisagreement, the Company will not solicit the Exclusive Customers, nor will itgrant to any other individual or entity the right to serve as a representativeof the Company to solicit the Exclusive Customers to contract with the Companyfor the Service.  Upon lapse of suchtwelve month period, Representative shall no longer have any exclusivecustomers but may continue to solicit all Customers, including the formerExclusive Customers, on a non-exclusive basis.

 

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

 

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

 

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

 

5.                                       Compensation of Representative.  As consideration for the servicesdescribed herein and following the execution of the agreement between thecompany and an Exclusive Customer or Customer, the Company agrees to payRepresentative a monthly commission as set forth herein.  Company shall pay Commissions toRepresentative by the last day of each calendar month for sales made to patronsof Customers or Exclusive Customers (Patrons) the preceding month.  “Commissions” are equal to Net Salesmultiplied by five (5%) percent.  Forpurposes of this provision, “Net Sales” means the actual amounts collected fromPatrons placing orders reduced by the amount of any taxes, shipping or handlingcharges, rush charges, refunds, credits, and allowances.  In the event the agreement with the Customeror Exclusive Customer call for sales to be made using the site establishedpursuant to the iParty.com Agreement, Representative shall not be entitled toany commissions on such sales as provided in the Addendum to the Iparty.comAgreement and the commissions payable under this paragraph shall be allcompensation due to Representative from Company.

 

6.                                       Role of Representative.  Representative’s sole relationshipwith the Company is that of an independent contractor, according to the termsand provisions of this Agreement.  Onlythe Company shall have authority to enter into agreements with Customers orExclusive Customers.  The Company shallnot make available to Representative or its employees the fringe benefitsavailable to employees of the Company, such as health insurance, lifeinsurance, disability insurance, vacation pay or sick pay.  Representative shall be responsible for itsown worker’s compensation, FICA, unemployment insurance, withholding taxes, etcfor its employees.

 

7.                                       Insurance.  The Representative shall, at its sole cost and expense,obtain and maintain Comprehensive General Liability insurance with respect toall aspects of the Representative’s business and operations, with a minimumliability limit of One Million Dollars ($1,000,000.00).  Such insurance shall be issued by aninsurance company or companies legally authorized to transact business in theState of Minnesota.  All policies of andfor such insurance shall name the Company as an additional insured thereunderand shall provide for at least thirty (30) days prior written notice, bycertified 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 theCompany such documentation as shall be necessary to evidence the existence ofsuch insurance.

 

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

 

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

 

10.                                 Termination.

 

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

 

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

 

(ii)                                  The abandonment of the business by theRepresentative;

 

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

 

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

 

(v)                                 The failure ofRepresentative to meet the minimum sales performance criteria established onExhibit B attached hereto and incorporated herein (the “Minimum PerformanceCriteria”); or

 

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

 

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

 

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

 

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

 

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11.                                 Nondisclosure of Confidential Information.

 

(a)                                  Nondisclosure.  Representativeacknowledges that he, she, or it shall have access to certain aspects ofConfidential Information (as hereinafter defined) of the Company. Unlessgranted written permission by the Company, Representative agrees not todirectly or indirectly use or disclose Confidential Information for so long assaid information retains the characteristics of Confidential Information asdefined herein.

 

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

 

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

 

12.                                 Injunctive Relief.  Representative agrees that anybreach of Paragraph 11 of this Agreement would confer irreparable harm on theCompany, which irreparable harm may not be compensable entirely with monetarydamages.  Representative agrees thatinjunctive relief is an appropriate remedy for breach of those provisions ofthis Agreement.  Such injunctive reliefshall be in addition to and not a limitation of any monetary relief or otherremedies or rights to which the Company is or may be entitled to in law, inequity, or otherwise.

 

13.                                 Miscellaneous Provisions.

 

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

 

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

 

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

 

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

 

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

 

(f)                                    Effect of Headings.  Thesubject headings of the paragraphs of this Agreement are included for purposesof convenience only and shall not effect the construction or interpretation ofany of its provisions.

 

(g)                                 Governing Law.  This Agreement shall begoverned by and construed in accordance with the laws of the State ofMinnesota.  Any and all causes ofaction, claims, suits or demands arising from or related to the terms of thisAgreement or the relationship of the Company and the Representative hereundershall be brought in federal or state courts located in the State of Minnesota.  The Representative hereby consents andsubmits to the jurisdiction of said courts and agrees that service of processmay be made by publication, by registered or certified mail, or in any mannerprovided under Minnesota or applicable Federal law.

 

(h)                                 Assignment.  Representative may not assignits interest under this Agreement without the express written consent of theCompany.

 

IN WITNESS WHEREOF, the parties have executedthis 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.                                       SiteFunctionality

 

Site Layout

Drop down menus

Right nav – Shop a la carte

Cross selling

Gateways – Halloween, Parrot Head

Basic Shop

 

b.                                      Serviceson 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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