B A C K G R O U N D

A. Furniture.com provides applications and services that facilitate the sale and service of furniture and that typically include the following components: (i) hosting certain software and providing certain software support, customer database hosting and other related services; (ii) populating its service and the associated database(s) with Client’s data and information; (iii) providing access to the services and the applicable database(s) by Client and its customers and potential customers, and (iv) updating and enabling Client to update the applicable databases.

B. Furniture.com’s services include the Application Services, the Implementation Services and the Custom Services, each as further described in Section 1 (collectively, the “Services”).

C. Furniture.com desires to sell and deliver the Services to and on behalf of Client, and Client desires to utilize the Services for itself and its customers, in accordance with the terms and conditions of this Agreement.

For and In consideration of the premises and mutual promises contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, each intending to be legally bound, agree as follows:

(a) Application Services. As further described in Exhibit A to this Agreement, Furniture.com will provide access to Furniture.com’s proprietary software applications (the “Software”) and perform certain ongoing services (the “Ongoing Services”) (collectively, the “Application Services”) during the “Term” (hereinafter defined) of this Agreement in consideration for payment of the fees set forth in Exhibit D. As further described in Exhibit A. Furniture.com will provide the host servers to run the Software, host the www.furniture.com website (the “Furniture.com Website”) and the www.roomstore.com website (the “Client Website”), process and store the Client Information and Customer Information, and provide all necessary facilities, equipment and peripherals used for such purpose (the “System”).

(b) Implementation Services. As further described in Exhibit A, and designated therein under the heading “Implementation Services”, Furniture.com will provide certain services to develop applications and other interfaces in order to establish connectivity between the systems of Furniture.com and Client and to populate the Software and the applicable database(s) of both the Furniture.com Website and the Client Website with the Client Information (as defined in Section 6(a)(iii)), including any customization of the Software necessary to initiate the Application Services and reasonably accommodate Client’s particular business and operational requirements (collectively, “Implementation Services”). Client hereby grants to Furniture.com the limited right to access necessary Client systems (whether owned, licensed or otherwise contracted) solely for the purposes of the foregoing, and for the continuing purpose of performing Furniture.com’s obligations pursuant to this Agreement.

(c) Custom Services. Furniture.com may provide certain additional services in connection with the implementation and/or operation of the Application Services, subject to terms and conditions to be agreed between the Parties in writing at such time as such services are requested by Client (“Custom Services”).

(d) SLA’s. The Application Services shall be provided to Client in accordance with the Service Level Agreement (“SLA”) set forth in Exhibit B.

(a) License. Provided that Client has paid the applicable fees, and subject to the terms and conditions set forth herein, Furniture.com grants to Client a nontransferable (except as permitted in Section 13(i)), limited license to utilize the Application Services, including the Software, solely for Client’s own business purposes and the business purposes of its subsidiaries, parent and affiliated companies. The administrative, password protected portions of the Application Services may only be accessed by an Authorized User (as defined in Section 2(b)). Client is expressly prohibited from sublicensing, selling, renting, leasing, providing service bureau or timeshare services, distributing or otherwise making the Application Services or the Software available to or for the

benefit of third parties other than any third party Authorized Users.

(b) Authorized Users. For purposes of this Agreement, an “Authorized User” is an individual; (i) who is an employee, an agent or other representative of Client, or other authorized third party individuals selected by Client; (ii) who has been properly issued a valid password that subsequently has not been deactivated, and (iii) has completed training, conducted by Furniture.com or trainers employed by Client and trained by Furniture.com to use the Application Services.

(c) Passwords. (i) Access to the system and database management functions of the Application Services by Authorized Users is enabled only by passwords that Furniture.com supplies to Client for issuance to Authorized Users, Client is solely responsible for the management and control of those passwords, and Authorized Users shall not be permitted to disclose or transfer a password to any third party.

(ii) Client acknowledges (A) that the protection of the passwords issued to Authorized Users is an integral part of Furniture.com’s security and data protection process and procedures and, further, (B) that Furniture.com and third parties with respect to which Furniture.com acts as a service provider will rely on Client utilizing and maintaining proper password control obligations and procedures. In the event that Furniture.com has reasonable cause to believe that a password is being improperly used by an Authorized User or is being used by an unauthorized person, Furniture.com reserves the right to deactivate that password without prior notice to the Client or the affected Authorized User; provided, however, that Furniture.com shall promptly provide notice as soon as practicable thereafter, so that a new password can be provided to Client.

(iii) Upon Client’s request, Furniture.com will provide Client users a valid username and password for access to Furniture.com administrative applications within three (3) business days of Furniture.com’s e-mail receipt of such users’:

First name

Last Name

E-mail Address

Phone Number

Position in Client organization

Permissions will be allowed based on the Client functions and permissions enabled for such users’ position in Client organization. Special permissions may be granted by exception.

(d) Client-Unique Materials. In the event that Furniture.com (i) files a petition of bankruptcy or a bankruptcy proceeding is brought against Furniture.com and not dismissed within sixty (60) days following its filing and Furniture.com fails to perform its obligations under this Agreement, or (ii) Furniture.com ceases to operate its business in the normal course without providing a successor, provided that this Agreement has not expired or been terminated, and that Client is not, at such time, in breach of this Agreement, upon Client’s written request, Furniture.com shall deliver to Client any customized or Client-unique source code of the Client Website, together with Furniture.com proprietary materials required to compile such source code into object code, if any (collectively, “Client-Unique Materials”). Upon Client’s receipt of the Client-Unique Materials as provided herein, Furniture.com’s obligations under the Agreement shall immediately terminate. Furniture.com shall, at such time, grant to Client a limited, non-exclusive, non-transferable and royalty-free license to use and modify the Client-Unique Materials, solely for Client’s internal purposes to support and maintain the Client Website for Client’s permitted use in accordance with the terms of this Agreement, which license shall terminate upon the expiration of the then-current (at the time of Client’s receipt of the Client-Unique Materials) Initial Term or Renewal Term of this Agreement. For the avoidance of doubt, during such term, Furniture.com shall be entitled to the Fees due and owing in accordance with Exhibit D hereto. Upon any provision of Client-Unique Materials in accordance with this Section 2(d), Furniture.com shall provide Client with copies of the versions of Client Information, Customer Information and other content then in use in connection with the Client Website.

(a) Zip Code Exclusivity. During the Term, in the zip codes set forth on Exhibit C (the “Exclusive Zip Codes”), except as set forth in Section 3(c) below or as permitted by Client in writing, Furniture.com shall not permit any person or entity other than Client to offer furniture and related services for sale through the domain name and website “Furniture.com”. In the event that Client expands the geographic area in which it operates to include additional zip codes, such zip codes, if not otherwise then presently serviced by another client of Furniture.com (or an entity with which Furniture.com is in active negotiations with respect to the servicing of such additional zip codes), and such other zip codes to which the Parties may agree, and following Furniture.com’s receipt of written notice from Client regarding such expansion, may be added to the Exclusive Zip Codes upon the execution of a written amendment hereto. In the event that Client ceases its delivery or service operations in any of the Exclusive Zip Codes, and does not subsequently reconstitute such operations in any such zip code within three (3) months of

such cessation, such zip code shall, upon the expiration of such three (3) month period, cease to be an Exclusive Zip Code hereunder. If, at any time Furniture.com has a bona fide desire and actual intent to allow a third party the right to offer furniture for sale through the domain name and website ^“Furniture.com” in the states of Louisiana, Mississippi, Alabama, Georgia, or Florida, Furniture.com shall provide a written notice to Client stating the zip codes to be offered to the third party. Client shall have a right of first refusal with regard to such zip codes prior to Furniture.com permitting such third party the right to offer furniture for sale the domain name and website “Furniture.com” and upon written notice to Furniture.com, such zip code shall be added to the Exclusive Zip Codes. If Client exercises its right of first refusal, Client agrees to commence delivery within such zip code within six (6) months following such exercise. If Client waives its right of first refusal, Furniture.com may enter into an arrangement with such third party; provided, however, if Furniture.com fails to enter into an agreement with such third party within six (6) months thereafter, Client will again have the right of first refusal with regard to such zip codes. There shall be no geographic limitation with respect to sales or marketing to Customers through the Client Website. For the purposes of this Agreement, a “Customer” means a person or entity that: (i) browses or purchases Client’s merchandise or services via the Furniture.com Website; and (ii) browses, makes a purchase on or otherwise interacts with the Client Website.

(b) Exclusive On-line Channel. During the Term, Client shall not, directly or indirectly, itself or through any parent, subsidiary or affiliate, permit its products and related services to be sold on-line to Customers in the Exclusive Zip Codes, other than through the Application Services. For purposes of this Agreement, “on-line” shall mean through the Internet, the World Wide Web, any similar communication methods, channels or protocols, and any successor thereto.

(c) Additional Efforts. Furniture.com and Client hereby acknowledge that the Parties may wish to supplement this Agreement with additional Internet efforts within the Exclusive Zip Codes. Any such initiatives shall be implemented upon the execution of a written amendment hereto.

(a) Services Fees. All fees hereunder are described in Exhibit D.

(b) Payments. All payments hereunder shall be in accordance with Exhibit D.

(c) Taxes. If any excise, use, property or other taxes, or any other governmental charges or surcharges

(including interest, penalties and fines) are due or are assessed on or with respect to any amounts payable by Client pursuant to this Agreement (other than taxes on the income or employees of Furniture.com), they will be the sole responsibility of, and payable by, Client.

(d) Audit. Each Party shall maintain complete, clear and accurate records of all revenues, fees, transactions and related documentation in connection with the performance of this Agreement (“Records”). All such Records shall be maintained for a minimum of three (3) years or such period required by applicable law, whichever is longer. For the sole purpose of ensuring compliance with this Agreement, each Party shall have the right, at its sole expense, upon reasonable prior notice and during normal business hours, to conduct a reasonable and necessary copying and inspection of portions of the Records of the other Party that are directly related to amounts payable to a Party pursuant to this Agreement, which right may, at such Party’s option be exercised by directing an independent certified public accounting firm subject to strict confidentiality restrictions to conduct such inspection. For the avoidance of doubt, any information disclosed pursuant to any such audit shall be considered the Confidential Information of the audited Party. The auditing Party shall pay for the expenses to conduct such audit. However, if the audit reveals an underpayment by the audited Party of more than five percent (5%) of the amount initially claimed to have been owed to the auditing Party hereunder, the audited Party shall immediately, upon the auditing Party’s request, pay the amount of such underpayment to the auditing Party and reimburse the auditing Party for its reasonable expenses associated with the audit.

(a) Client Participation. (i) In conjunction with its obligation to participate in the Implementation Services as set forth and designated as such in Exhibit A and the Client responsibilities designated therein (“Implementation Client Responsibilities”), Client will assign personnel to perform the applicable tasks and will make commercially reasonable efforts to supply information and otherwise assist as reasonably necessary to affect the commencement of the Application Services via the Implementation Services.

(ii) For the avoidance of doubt, each Party acknowledges and agrees that its respective obligations under this Agreement may be contingent upon the timely performance by the other Party of such other Party’s obligations under this Agreement, including such other Party’s obligations under Exhibit A. For the further avoidance of doubt, neither Party shall be held liable for any failure or delay by such Party in meeting any applicable performance or delivery schedule under this

Agreement if such failure or delay is caused by the other Party’s failure or delay in performing any of its obligations hereunder (a “Delay”). Any such Delay shall result in an automatic extension of the applicable performance or delivery schedule required of such Party by the period of such Delay.

(b) Client Access to Internet. Other than connectivity between Client’s systems and Furniture.com’s servers, as established pursuant to the Implementation Services and which connectivity shall be the responsibility of Furniture.com, Client is solely responsible for separately obtaining any software, equipment and services, including connectivity, required for Client to access and communicate with the Application Services. Such requirements are as set forth in Exhibit E.

(c) Accuracy of Client Data and Information. Client is solely responsible for the integrity of all data and information that is provided to Furniture.com by Client under this Agreement (e.g., the Client Information), including completeness, accuracy, validity, authorization for use and integrity over time, regardless of form and format, and whether or not such data is used in conjunction with the Application Services. Further, Client and Furniture.com shall jointly work to assure that the initial importing of the Client Information into Client’s database by Furniture.com has been properly performed. Client shall use commercially reasonable efforts, utilizing industry standard tools and procedures, to assure that, upon delivery to Furniture.com or incorporation into Furniture.com’s databases, the Client Information that is extracted from Client’s databases, or which is otherwise provided by Client hereunder, shall not contain any viruses, worms or similar destructive or malicious features, programs or routines.

(d) Product Selection. Client represents, warrants and covenants that, commencing no later than six (6) months following the Effective Date and at all times thereafter during the Term that no less than seventy five percent (75%) of its furniture (excluding accessories) product selection shall be made available through the Application Services. Client shall provide product photography, information, and finish samples or upholstery swatches to allow accurate and complete presentation of such product selection.

(e) Promotion. Client may include the Furniture.com name, logo (if applicable) and URL (www.furniture.com), as applicable, in Client print, radio, television and on-line (as defined in Section 3(b)) advertising and promotional activities, including any on-line presence controlled by Client. Unless otherwise provided by Furniture.com, Client may utilize the logos and marks set forth on Exhibit F. Subject to the terms and conditions of this Agreement, Furniture.com hereby grants to Client, for the Term and

solely as necessary to comply with this Section 5(e), a limited license to utilize the Furniture.com trademarks and logos set forth on Exhibit F, utilizing the colors and proportions provided in such exhibit.

(f) No Reverse Engineering. Client shall not attempt to decode, disassemble, copy, transmit, transfer or otherwise reverse engineer the Services, including the Software.

(a) Parties’ Obligations. Each of the Parties agrees: (i) to maintain, in strict confidence at all times any information that it receives prior to and during the Term of this Agreement, whether written or otherwise related to the business of the other Party, including (A) Client’s data (including data received from Client’s Customers and other Client Information) and information provided to Furniture.com for utilization in connection with the Services, (B) each Party’s sales, marketing and technical information relating to such Party’s services, customers, partners, financial condition, marketing plans, Orders, Delivered Sales, Returns and Reprocessed Orders (each as defined in Exhibit D) or Order Falloff (as described at Section 12(f)) Information, survey results, order cancellations and activities in general, (C) Furniture.com’s technical information relating to the Software and the Application Services, and (D) the terms and conditions of this Agreement, including commission percentages (collectively, “Confidential Information”); and (ii) (A) not to disclose, use, transmit, inform or make available to any entity, person, body or governmental agency any of the Confidential Information, except as a necessary part of the rendering or utilizing of the Services, and, further, (B) to take all such actions as are reasonably necessary and appropriate to preserve and protect the Confidential Information and the Parties’ respective rights therein in, at all times exercising at least a reasonable level of care.

(ii) Notwithstanding the foregoing, Client acknowledges that in connection with delivery of Application Services, certain of Client’s Confidential Information, in particular, the Client Information, will be hosted by Furniture.com or third parties in accordance with Section 6(d), on servers that access the Internet. Furniture.com’s only obligation for protection of the Client Information is to provide the hosting security described in Exhibit G. Furniture.com shall have no responsibility or liability for unauthorized access to or dissemination of Client Information by Authorized Users whether as a result of breach of data security, misappropriation or misuse of passwords or any other cause, other than Furniture.com’s failure to comply with the security requirements in Exhibit G.

(iii) For purposes of this Agreement, “Client information” means Confidential Information or other information, about Client’s business, products, services and Customers that Client and/or its Customers deliver to Furniture.com for use in its implementation or performance of the Services, including data and images. Client acknowledges and agrees that product information in connection with the offering by Furniture.com of Client’s products through the Application Services will be disclosed to the public via the Application Services.

(b) Exclusions. Confidential Information shall not include any information (other than Personal Information) that is (i) already known to the receiving Party at the time of the disclosure; (ii) publicly known at the time of the disclosure or becomes publicly known through no wrongful act or failure of the receiving Party; (iii) subsequently disclosed to receiving Party on a non-confidential basis by a third party not having a confidential relationship with the other Party hereto that rightfully acquired such information; (iv) communicated to a third party by receiving Party with the express written consent of the other Party hereto, or (v) legally compelled to be disclosed pursuant to a subpoena, summons, order or other judicial or governmental process, provided the receiving Party provides prompt notice of any such process to the other Party (unless such notice is prohibited by the terms of such process) so that such Party will first have the opportunity to obtain a protective order prior to any disclosure and in the event that no such protective order is obtained (or the other Party has waived compliance with the terms of this section), the receiving Party will furnish only that portion of the Confidential Information which it is advised by counsel is legally required and will exercise all reasonable efforts to obtain reliable assurance that confidential treatment will be accorded the Confidential Information.

(c) Need to Know. Each Party agrees to restrict access to the Confidential Information of the other Party to those employees or agents who require access in order to perform or use the Application Services, Implementation Services or Custom Services, acknowledging that certain Confidential Information of each Party may be disclosed as part of the Application Services; and, except as otherwise provided, neither Party shall make Confidential Information available to any other person or entity without the prior written consent of the other Party.

(d) Outsourcing. Client understands and agrees that Furniture.com may transfer Confidential Information of Client to a third party hosting entity for the purposes of providing the communications infrastructure, hosting services and/or related support and other operations necessary to deliver all or certain portions of the Services; provided that Furniture.com, in turn, binds such third party to confidentiality, privacy, security and non-disclosure terms that are at least as protective of Furniture.com’s and

Client’s interests as the terms stated herein and discloses to Client the existence of such disclosure to, and the name of, such third party hosting entity.

(e) Destruction or Return of Confidential Information. In the event of termination or expiration of the Term of this Agreement for any reason, each Party shall promptly return to the other Party, or destroy, as the Parties agree, all copies of the other Party’s Confidential Information that it has received, including Client Information, all copies, notes or other derivative material relating to the Confidential Information shall be promptly retrieved or destroyed, as agreed, and no such material shall be retained or used by the receiving Party in any form or for any reason

(a) Furniture.com. (i) Furniture.com owns all rights, title and interest in and to the Services, including the Software. Further, Client agrees that the Application Services screens and any output of the Services, excepting the Client Information and any Customer Information (as defined below at Section 7(b)), are the property of Furniture.com and subject to United States and other applicable patent, copyright, trademark and trade secret laws and treaties; and Client agrees that it shall not remove, alter or obstruct any ownership or use legends that Furniture.com places on any such screens or output of the Services. Nothing contained in this Agreement shall be construed as granting Client any rights in or to the Application Services (including the Software and output of the Application Services), the deliverables from the Implementation or Custom Services or related Furniture.com Confidential Information, other than the right to use the Services and any applicable Confidential Information of Furniture.com during the Term, in accordance with this Agreement.

(ii) Client agrees that Furniture.com has and retains all rights to use any data and information relating to the Software and Services that it receives from Client including any information that constitutes, or results in, an improvement or other modification to the Software or the Services, but excluding the Client Information and Customer Information. For the avoidance of doubt, Furniture.com shall own all rights, title and interest in and to any inventions, modifications, discoveries, designs, developments, improvements, processes, software, works of authorship, formulae, techniques and know-how (“Developments”) which are developed by Furniture.com as a result of the Services, and to the extent that the ownership of any Developments vests in Client, Client hereby assigns all rights, title and interest, including all intellectual property rights, therein and thereto, to Furniture.com.

(iii) All rights (including all intellectual property rights) to and/or with respect to any items, materials or services relating to the Services, including the Software and the Application Services, not expressly licensed by Furniture.com hereunder, are expressly and exclusively retained by Furniture.com and its licensors.

(b) Client. (i) Furniture.com agrees that all Client Information and Customer Information provided to Furniture.com under this Agreement for use in connection with the Application Services is the property of Client. The domain names for the Client Website are the sole and exclusive property of Client (even if procured and administered by Furniture.com for Client), constitute “Client Information”, and Furniture.com will only use such domain names in a manner consistent with instructions given by Client relative to the operation of the Client Website. In order for Furniture.com to modify and configure the Client Information provided by Client to Furniture.com hereunder for use in connection with the Application Services, Client hereby grants to Furniture.com a perpetual, irrevocable license to use, copy, modify, adapt, display and create derivative works from Client Information provided by Client to Furniture.com. The Parties agree, subject to the rights of Client’s Customers, that information and any other personally identifiable information, submitted by Customers of Client through the Application Services (the “Customer Information”), shall belong to Client. Client hereby grants to Furniture.com a license to utilize aggregated data derived from the Customer Information, provided that all personally identifiable information is first removed from such Customer Information, and provided that no aggregated data which would identify the Client shall be used by Furniture.com. The license set forth in the immediately preceding sentence shall be perpetual and irrevocable with respect to information relevant to Furniture.com’s financial reporting and analysis and shall be for the duration of the Term with respect to all other Information.

(ii) Client shall own all Intellectual Property Rights in and to the Client’s trademarks, service marks, trade names, service names, domain names, symbols, logos, icons, graphic images and copy (collectively, “Client’s Marks”), Client Website, Client Information and Customer Information. “Intellectual Property Rights” means, on a world-wide basis, any and all now known or hereafter known tangible and intangible (i) rights associated with works of authorship including, without limitation, copyrights, moral rights and mask-works, (ii) rights in Client’s Marks, (iii) trade secret rights, (iv) patents, designs, algorithms and other industrial property rights, (v) all other intellectual and industrial property rights of every kind and nature and however designated, whether arising by operation of law, contract, license or otherwise, and (vi) all registrations, applications, renewals, extensions, continuations, divisions or reissues

thereof now or hereafter made, existing, or in force (including any rights in any of the foregoing). Furniture.com shall not at any time adopt or use, without Client’s prior written consent, any variation of Client’s Marks or other Intellectual Property Rights, or any mark likely to be similar thereto or confused therewith. Any and all goodwill arising from Furniture.com’s use of Client’s Marks or Intellectual Property Rights shall inure solely to the benefit of Client, and neither during nor after the termination of this Agreement shall Furniture.com assert any claim to Client’s Marks, Intellectual Property Rights or associated goodwill. Furniture.com shall use Client’s Marks in conformance with any trademark guidelines conveyed to Furniture.com by Client from time to time.

(a) Standards of Performance. The Services shall be provided in a professional and workmanlike manner, using personnel with skills and experience appropriate to the applicable components of the Services, in a manner consistent with industry standards, and in accordance with any specifications set forth in this Agreement and any exhibit thereto (e.g., Exhibit A). As regards the Application Services in particular, Furniture.com warrants that such services shall be consistent with industry standards and conform to the SLA’s stated in Exhibit B; and in the event of any breach of the SLA’s stated in Exhibit B, Client’s sole and exclusive remedy therefor shall be in accordance with Section 12(g).

(b) Disclaimer of Warranties. EXCEPT AS OTHERWISE PROVIDED IN THIS AGREEMENT, FURNITURE.COM HEREBY EXPRESSLY EXCLUDES AND DISCLAIMS ALL WARRANTIES OF ANY KIND WHATSOEVER RELATING TO THE SERVICES. WITHOUT LIMITING THE GENERALITY OF THE IMMEDIATELY PRECEDING SENTENCE, FURNITURE.COM DISCLAIMS ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, INCLUDING THE SOFTWARE AND THE OUTPUT THEREOF. FURNITURE.COM IS PROVIDING THE SERVICES TO CLIENT WITH NO OTHER WARRANTIES WHATSOEVER, INCLUDING ANY WARRANTIES ARISING FROM COURSE OF DEALING, COURSE OF PERFORMANCE OR USAGE OF THE TRADE. FURTHER, FURNITURE.COM DOES NOT WARRANT THAT THE SERVICES WILL BE ERROR-FREE OR BE PROVIDED (OR BE AVAILABLE) WITHOUT INTERRUPTION. THE FOREGOING DISCLAIMER ALSO APPLIES TO FURNITURE.COM’S SUBCONTRACTORS AND ANY OTHER THIRD PARTY SUPPLIERS OF PRODUCTS AND SERVICES (“SUPPLIERS”).

(a) Indemnity. Furniture.com will indemnify, defend and hold harmless at Furniture.com’s expense Client, its members, subsidiaries, divisions, parent, other affiliated or related companies or entities, and each of their respective current and former successors, assigns, directors, officers, agents, representatives, attorneys, fiduciaries, administrators, stockholders and employees (collectively, “Client Covered Entities”) from and against any and all costs, liabilities, losses and expenses, including reasonable attorney’s fees, and amounts awarded by a court or paid in settlement arising from any claim, suit, action or proceeding brought by any third party against any of the Client Covered Entities (i) that the Services (including the Software and Systems, but excluding any Client Information and Customer Information) infringe or misappropriate, as applicable, any United States patent, copyright, trade secret, trademark, or any other intellectual property or proprietary rights of any third party, (ii) that Furniture.com or any of its agents or employees have used Client Information or Customer Information in violation of this Agreement. Furniture.com shall have sole control of the defense with respect to any such claim (including settlement of such claim).

(b) Remedies. If a court of competent jurisdiction or Furniture.com determines that any claim that the Services or any component thereof, excluding the Client Information and Customer Information, infringe or misappropriate, as appropriate, any United States patent, copyright, trade secret, or trademark, prevails or is likely to prevail, Furniture.com may, at its option and expense, as its sole and exclusive obligation, and Client’s sole and exclusive remedy for any infringement or misappropriation of intellectual property rights, (i) procure the right for Client to continue to use the Software, System and Services; (ii) replace or modify the Software, System or Services so that they or it no longer Infringe or misappropriate, as applicable, any such United States patent, copyright, trade secret, trademark or other intellectual property right; or (iii) terminate this Agreement. Client shall, however, have the right to terminate this Agreement on notice to Furniture.com where a claim under Section 9(a) materially disrupts Client’s business operations related to the Furniture.com Website and/or Client Website.

Except as otherwise provided herein, Client shall indemnify, defend and hold Furniture.com, its directors, officers, employees, its affiliates and customers (collectively, “Furniture.com Covered Entities”) harmless from and against any and all costs, liabilities, losses and expenses (including reasonable attorney’s fees) resulting from any claim, suit, action or proceeding brought by any third party against the Furniture.com Covered Entities that

arise out of the (i) Client’s use or misuse of the Services, including improperly issuing or managing issued passwords; (ii) the data and information (whether or not Confidential Information) provided by Client in conjunction with the Services; (iii) the consequences of Client’s utilization of the Services in respect of any third party; or (iv) Client or any of its agents or employees have violated confidentiality, privacy or security obligations with respect to Customer Information.

(a) Liability Limitation. (i) NEITHER FURNITURE.COM NOR ANY OF ITS SUPPLIERS ON THE ONE HAND, NOR CLIENT ON THE OTHER, SHALL HAVE ANY LIABILITY WHATSOEVER TO THE OTHER PARTY OR ANY OTHER THIRD PARTY FOR LOSS OR DAMAGE OF DATA, REPORTS, SECURITY, LOST PROFITS OR REVENUES OR SIMILAR ECONOMIC LOSS OR FOR ANY CONSEQUENTIAL, SPECIAL, INCIDENTAL, INDIRECT OR PUNITIVE DAMAGES, WHETHER IN CONTRACT, TORT (INCLUDING NEGLIGENCE OR STRICT LIABILITY) ARISING FROM OR RELATING TO THIS AGREEMENT OR THE SERVICES, INCLUDING THE OUTPUT THEREOF, WHETHER IN CONTRACT, TORT (INCLUDING NEGLIGENCE OR STRICT LIABILITY) OR OTHERWISE.

(ii) NEITHER FURNITURE.COM NOR ANY OF ITS SUPPLIERS ON THE ONE HAND, NOR CLIENT ON THE OTHER, SHALL BE LIABLE IN CONNECTION WITH THE PERFORMANCE OR NON-PERFORMANCE OF THIS AGREEMENT OR THE SERVICES FOR ANY DAMAGES IN EXCESS OF THE AMOUNTS CHARGED TO CLIENT FOR THE TWELVE (12) MONTH PERIOD IMMEDIATELY PRIOR TO THE OCCURRENCE OF THE EVENT THAT GAVE RISE TO ANY SUCH CLAIM.

(b) Exclusions. The limitations set forth in Section 11(a) shall not apply to either Party’s obligations of indemnity or in connection with the protection of Confidential Information or intellectual property rights. The limitation set forth in Section 11(a)(ii) shall not apply to actions relating to the payment of fees due either Party hereunder.

(c) Transmission of Data. Furniture.com is not responsible for loss of data in transmission. In the event of the improper transmission or loss of data in transmission, Furniture.com will use commercially reasonable efforts to recreate such transmission at Client’s expense.

(d) Time Limitation on Claims. No action arising out of this Agreement or the performance or non-performance thereof, other than any action arising out of an underpayment under Section 4(d), may be brought more than one (1) year after such action arises.

(a) Initial Term. The initial term of this Agreement shall commence on the Effective Date and shall continue in full force and effect for a period of ten (10) years following the date upon which products of Client are first offered to Client’s Customers through the Application Services (the “Initial Term”).

(b) Renewal Terms. At the conclusion of the Initial Term, this Agreement shall renew for additional periods as the Parties may mutually agree (each a “Renewal Term”). (The Initial Term and any Renewal Terms, collectively, are referred to herein as the “Term”.)

(c) Termination for Breach; Insolvency. Either Party may terminate this Agreement upon prior written notice to the other party: (i) if the other Party materially breaches any term or condition of this Agreement and fails to cure such breach within thirty (30) days after receipt of written notice of the same, subject to Section 12(d); (ii) immediately if the other Party becomes the subject of a voluntary position in bankruptcy or any voluntary proceeding relating to insolvency, receivership, liquidation or composition for the benefit of creditors; (iii) immediately if the other Party becomes the subject of an involuntary petition in bankruptcy or any involuntary proceeding relating to insolvency, receivership, liquidation or composition for the benefit of creditors, and such petition or proceeding is not dismissed within sixty (60) days following filing or (iv) if, due to the fault of such other Party, the Application Services have not been made available to Internet users’ within six (6) months after the Effective Date.

(d) Nonpayment. Ten (10) business days following written notice to Client that its account is past due with regard to amounts that are not subject to a good faith dispute, Furniture.com, in its sole discretion, may terminate or suspend all or any portion of the Services immediately.

(e) Customer Dissatisfaction. Either party may terminate this Agreement, upon thirty (30) days’ prior written notice to Client, in the event that the results of Furniture.com’s surveys of Client’s Customers (the current form of which is attached as Exhibit I) indicates, in two (2) out of any three (3) consecutive calendar quarters during the Term, that ten percent (10%) or more of such Customers responded “very dissatisfied” with respect to such Customers’ overall evaluation of Client’s services. Furniture.com shall conduct the surveys on a regular basis, shall provide Client with the results of such surveys on a monthly basis, and shall notify Client when the ten percent (10%) threshold was met or surpassed in any quarter; provided further, however, that neither party may terminate this Agreement as aforesaid where such Customer

dissatisfaction is in any way attributed to that party’s negligence or failure to perform its obligations under this Agreement.

(f) Order Falloff. Furniture.com may terminate this Agreement, upon thirty (30) days prior written notice to Client, in the event that, as calculated on an annual basis, the Order Falloff Percentage (as defined below) for Orders (as defined in Exhibit D) exceeds the lesser of (i) Client’s historical Order Falloff Percentage, as reported to Furniture.com within thirty (30) days following the commencement of each calendar year during the Term and (ii) fifteen percent (15%). For purposes hereof, the “Order Falloff Percentage” shall mean the percentage of Orders executed by Customers of Client that, do not result in Delivered Sales (as defined in Exhibit D). Any surveys used to determine the reason for Order Falloff shall be subject to the reasonable review and approval of Client.

(g) Service Level Failure. Client may terminate this Agreement, upon thirty (30) days’ prior written notice to Furniture.com, in the event that Furniture.com fails to achieve the Minimum Application Services Level Requirement set forth in Section 1(c) of Exhibit B during three (3) of any six (6) consecutive calendar months during the Term.

(h) Effects of Termination. Upon the effective date of expiration or termination of the Term of this Agreement, (i) Furniture.com immediately will cease providing Client with the Application Services and any other applicable component of the Services and all license grants hereunder that are effective for the Term shall immediately cease; (ii) all issued passwords shall be deactivated; and (iii) Client immediately shall pay in full any and all monies that are owed by the Client under this Agreement and not subject to a good faith dispute for the Services furnished up to the effective date of the termination or expiration of the Term; and (iv) all of Client’s obligations to market, use or advertise the Application Services shall cease. Notwithstanding the above, provided that Client’s obligations to pay Fees are current, Furniture.com shall cooperate with Client to process any outstanding orders which were placed prior to the termination of the Application Services in the normal course of business.

(a) Insurance. Each Party, at its own expense, shall procure and maintain policies of insurance to include the following coverage: (i) Workers’ Compensation Insurance coverage for its own employees that meets the statutory limits of the states in which such Party operates, as well as Employer’s Liability coverage with limits of at least $2,000,000; and, (ii) Comprehensive general liability of at least $4,000,000. Upon request, each Party shall furnish to the other Party a Certificate of Insurance evidencing

such coverage and naming the other Party as an additional insured as its interests may appear. Nothing in this section shall be deemed to limit either Party’s responsibility to the amounts stated above or to any limits of such Party’s insurance policies.

(b) Construction. Whenever the terms “including” or “include” are used in this Agreement in connection with a single item or a list of items within a particular classification (whether or not the term is followed by the phrase “but not limited to” or words of similar effect) that reference shall be interpreted to be illustrative only, and shall not be interpreted as a limitation on, or an exclusive enumeration of the items within that classification. As used herein, the singular shall include the plural and the plural may refer only to the singular. The use of any gender shall be applicable to all genders. The headings and captions contained herein are for purposes of convenience only and are not a part of this Agreement.

(c) No Waiver. No waiver of any default, condition or breach of this Agreement shall be deemed to imply or constitute a waiver of any other default, condition or breach of this Agreement, whether of a similar nature or otherwise.

(d) Survival. Sections 4, 5(f), 6, 7, 9, 10, 11, 12 and 13 shall survive any termination of this Agreement, as well as any other obligations of the Parties that contemplate performance by a Party following the termination or expiration of this Agreement.

(e) Governing Law; Venue. This Agreement is governed by the laws of the Commonwealth of Massachusetts, excluding its conflict of laws provisions. The Parties agree that the exclusive venue for any action brought in connection with this Agreement shall be the federal and state courts located in or having jurisdiction over Boston, Massachusetts and each Party submits to the exclusive personal jurisdiction of such courts for such purpose.

(f) Notices. Any notices or other communications required or permitted to be given or delivered under this Agreement shall be in writing and shall be sufficiently given if (i) delivered personally, (ii) mailed by certified or registered mail return receipt requested, postage prepaid, or (iii) sent by overnight guaranteed delivery service, and addressed to the Party’s proper address as set forth in the beginning of this Agreement or to such other address or addressee as either Party may from time to time designate to the other by written notice. Any such notice or other communication shall be deemed to be given as of the date it is delivered to the recipient.

(g) Severability. In the event that any one or more of the provisions of this Agreement are invalid or otherwise

unenforceable, the enforceability of remaining provisions shall be unimpaired.

(h) Force Majeure. Other than with respect to payment obligations hereunder, in the event that either Party is unable to perform any of its obligations under this Agreement due to a natural disaster, actions or decrees of governmental bodies, telecommunications carriers and other suppliers, terrorist activities or other events beyond such Party’s reasonable control, such Party’s obligations under this Agreement shall be suspended during the duration of any such event. Customer shall, however, have the right to terminate this Agreement in the event of a continuous failure of Furniture.com to perform substantially in accordance with the terms and conditions of this Agreement, due to a force majeure event, for a period exceeding fifteen (15) business days in duration.

(i) Assignment. This Agreement shall be binding upon and inure to the benefit of the respective successors and assigns of the Parties. However, neither Party may assign this Agreement, in whole or in part, without the prior written consent of the other Party, which consent shall not be unreasonably delayed, conditioned or withheld.

(j) Publicity; Marketing. Client agrees that Furniture.com may refer to Client by name, together with a brief description of Client’s business, in any press releases or advertising and marketing publications utilized or issued by Furniture.com, provided that such references and descriptions are consistent with any mutually agreed press release(s) issued by the Parties. Upon execution of this Agreement, the Parties agree to issue a press release similar to that attached hereto as Exhibit H.

(k) No Third Party Beneficiaries. Nothing in this Agreement is intended or shall be construed as a third party beneficiary agreement, nor shall this Agreement confer, convey or be deemed to accord any rights to any third party.

(l) Independent Contractor. Each Party hereto shall remain an independent contractor and nothing herein shall be deemed to constitute the Parties as partners, agents or joint ventures. Further, neither Party shall have the authority to act, or attempt to act, or represent itself, directly or by implication, as an agent of the other or in any manner assume or create, or attempt to assume or create, any obligation on behalf of or in the name of the other, nor shall either be deemed the agent or employee of the other.

(m) Equitable Remedies. Each Party acknowledges that a breach of its obligations under Sections 5, 6 and 7 of this Agreement could cause irreparable harm to the other Party and that monetary damages may be difficult to ascertain. Therefore, without prejudice to the rights and remedies otherwise available to it, each Party shall be

entitled to seek relief by way of injunction or specific performance if the other Party breaches any such provision of this Agreement.

(n) Entire Agreement. This Agreement, including all Exhibits, Schedules and Attachments hereto and hereby incorporated herein, embodies the entire agreement between the Parties and supersedes all previous and contemporaneous agreements, understandings and arrangements with respect to the subject matter hereof,

whether oral or written, and may be amended only by a written instrument duly signed by the Parties. For the avoidance of doubt neither (l) any correspondence (electronic or otherwise) that does not expressly reference this Agreement and the intent of such correspondence to amend this Agreement and that does not otherwise comply with this Section 12(n); nor (b) any course of conduct, shall operate to amend this Agreement.

While Furniture.com’s fee structure provides substantial incentive for delivering an optimal experience to Client and Client Customers, Furniture.com also will meet the following service levels.

1. APPLICATION SERVICES AND SYSTEM AVAILABILITY

(a) Definition. Application Services availability is defined as the amount of time the Application Services, Websites and System are available for access by Authorized Users and Customers of Client and capable of performing operations in accordance with this Agreement.

(b) Measurement. The measurement for Application Services availability is based on the amount of time (excluding scheduled maintenance downtime) that the Application Services are available to Authorized Users and Customers of Client and capable of performing operations in accordance with this Agreement. Non-availability is the amount of time that the Application Services are neither available nor capable of performing such operations. The measurement for unavailability for the Application Services is the time elapsed from when the Application Services are not available nor capable of performing operations to when the Application Services become available and capable of performing operations: Daily system logs will Indicate availability downtime and will be used to track outages will be provided to Client upon request. Application Services availability for a given month is calculated as a percentage equal to the number of minutes the Application Services are available in the month minus the number of minutes of scheduled downtime during the month, divided by total number of minutes in the month minus number of minutes of scheduled downtime during the month. Furniture.com will constantly monitor the Application Services availability and promptly report to Client any periods of unavailability, including any incidence of lost

messages or inaccurate data. Within ten (10) days of the end of each calendar month, Furniture.com will provide Client with a report in respect of the previous month’s Application Services availability.

(c) Minimum Application Services Level Requirement. The availability of Application Services will be available, at a minimum ninety-nine percent (99%) of the time on a monthly basis. The Websites shall be designed and maintained to facilitate-fast and simple downloading to the Customer’s device and minimize the time required to download and allow the Customer to commence Interacting with the applicable Website, Furniture.com agrees that the response time to Customers will be within commercially reasonable industry norms.

2. SCHEDULED DOWN-TIME

(a) Definition. There will be a weekly scheduled downtime period to perform system maintenance, backup and upgrade functions for the Application Services. This period will not exceed four (4) hours per week and will be scheduled in advance. Notification of scheduled downtimes will be made twelve (12) hours prior to the scheduled downtime, via email to addressees designated by Client. Weekly scheduled maintenance shall only be performed between the hours of 2:00 A.M. and 6:00 A.M. Eastern Standard Time. If a longer scheduled downtime period is required, Client’s consent is required. Furniture.com will use commercially reasonable efforts to minimize Application Services downtime, even during scheduled downtime.

(b) Measurement. The measurement for scheduled downtime for the Application Services is the actual time elapsed from when the Application Services are not available to perform operations to when the Application Services become available to perform operations, based on the scheduled downtime. Daily system fogs will indicate scheduled Application Services downtime and will be used to track outages, and will be provided to Client upon request.

3. SECOND LEVEL CLIENT SUPPORT BY FURNITURE.COM.

Furniture.com will provide second level support to Client only (not Customers of Client) as described below:

(a) Availability. Furniture.com’s second level support will be available to accept and respond to problem calls from Client from 8:00 A.M. to 5:00 P.M. Eastern Standard Time, Monday through Friday, excluding United States national holidays.

(b) Definitions of Severity Levels.

Severity 1 problems are events that have a significant impact on the operation of the Application Services and a materially adverse impact on the Client and/or the Authorized Users and Customers of Client as described below:

Severity 2 problems are events that do not have a significant impact on the operation of the Application Services or Authorized Users’

and Customers of Client’s use of the Application Services, as described below:

As an example only, and without limitation, an essential function is the processing and administration of Orders via the Application Services.

Severity 3 problems are minor events that do not have a significant impact on the operation of the Application Services or its access by Authorized Users and Customers of Client.

(c) Problem Resolution Response Effort.

Severity 1: Furniture.com will assign sufficient resources to resolve the problems within a target resolution timeframe of four (4) hours after receiving notice of the problems, with the goal of maintaining the service levels agreed to in this SLA. For a Severity 1 problem, Furniture.com will use continuous effort to resolve the problem until the Application Services are back to normal operations. Severity 1 problems will be continuously monitored, and Client will be notified of the status through email.

Severity 2: Furniture.com will assign sufficient resources to fix the problem in the target resolution timeframe. Severity 2 problems that have no workarounds will have a target resolution of two (2) days, depending on the corrective actions required to return the Application Services to normal operations. Furniture.com will communicate these corrective actions and resolution timeframes to Client through email.

Severity 3: Furniture.com will assign sufficient resources to fix the problem in the target resolution timeframe. Severity 3 problems that have no workarounds will have a target resolution of three (3) days, unless otherwise specified by Furniture.com for a particular problem.