EXHIBIT 9
AEC ONE STOP GROUP, INC.
DATABASE LICENSE AND
CONSUMER DIRECT FULFILLMENT SERVICES AGREEMENT
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AEC ONE STOP GROUP, INC.
DATABASE LICENSE AND
CONSUMER DIRECT FULFILLMENT SERVICES AGREEMENT
1. Parties: This Database License and Consumer Direct Fulfillment Services
Agreement ("Agreement") is being entered into as of this 7th day of April,
1999, by and between AEC One Stop Group, Inc., a Delaware corporation,
with its principal offices located at 0000 Xxxxx Xxxxx Xxxxx, Xxxxx
Xxxxxxx, Xxxxxxx 00000, hereafter referred to as ("AEC"), and XXXXXX.XXX,
INC., a Delaware corporation, with its principal place of business located
at 000 Xxxxxxx Xxxxxx, Xxxxx 0X, Xxxxxxxx, XX 00000xx an Interactive
Retailer (as an "on-line" store or otherwise similarly), hereafter
referred to as ("COMPANY" or "your" or "you").
2. Services: AEC (I) will supply COMPANY with use of its All-Music Guide in
electronic form (the "Databases"), (ii) will supply COMPANY with updating
and general service with regard thereto, and (iii) will perform as the
wholesale provider (i.e., fulfillment) of the musical recordings and
related products which COMPANY sells via its Interactive Retailing.
Particulars of such services and performance standards are set forth in
General Terms & Conditions Agreement attached.
3. Exclusivity: In using the Databases, you agree to use such Databases
exclusively in connection with your Interactive Retailing (i.e., not to
use competitive services for your internet retailing business, except as
set forth below ) and to use AEC's audio fulfillment services exclusively
in connection with your internet retail sales of audio products sold to
you by AEC as provided herein (i.e., subject to product availability and
the other terms set forth in the Terms and Conditions attached hereto).
Notwithstanding the foregoing, if you determine in good faith that your
Interactive Retailing services will be materially enhanced by using a
third party database ("Other Database"), you agree that you shall:
a. In no way co-mingle the AEC Database fields and data elements with the
Other Database(s) or elements thereof; and
b. In all respects identify and brand the AEC Database elements
in strict compliance with the requirements of this Agreement.
4. Term: Three years from date hereof, unless extended or earlier terminated
by consent of the parties or pursuant to the General Terms & Conditions
attached hereto, e.g., if AEC fails to meet adequate Performance Standards
(as defined therein) or your sales levels for any three month period
(after a start-up period) average less than $25,000 a month. Term may be
extended an additional two (2) years, for a total of five (5) years, by
agreement of the Parties. Initial term, extensions and renewals shall be
referred to as the Term of this Agreement.
5. Fees:
(i) Fulfillment Sales - No Special Fee: Sales shall be fulfilled at
AEC's standard "one-stop" prices "to the trade", as they exist
generally from time to time. Initial pricings are as provided in the
General Terms & Conditions attached hereto (see particularly Exhibit
I thereto) and subsequent prices shall be generally noticed to the
trade and you by AEC.
(ii) Images - No Additional Fee: There shall be no additional fee for
inclusion of digitized or electronic images (e.g., album cover
graphics, portraits, etc) ("Images") in the Databases. Please
indicate whether you would like the Images to be provided:
X Include Images ___ Do not include Images(check one)
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(iii) Database Use: the Database License Fee ("License Fee") shall
be based on your aggregate site fulfillment sales, and shall be equal to :
o(1.5%) of monthly sales; against a monthly guaranteed minimum amount of $2,000.
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(iv) Set-up Fees:
o With regard to order processing, a one-time set-up fee of either:
__ $1,000 for Batch Order Processing or
X $3,000 for interactive "real-time" processing of
orders. (check one)
o $1,000 as a general set-up deposit for the Database, but such
fee shall be refunded in its entirety if and when your net
cumulative AEC fulfillment sales reach $150,000.
Non-refundable if this Agreement is terminated by AEC for not
meeting sales minimums.
o In each case, set-up fees are payable concurrent with the execution hereof.
6. Sales: As used herein, and in the General Terms and Conditions, "Sales"
shall mean sales of product by
AEC to COMPANY, (as defined in the General Terms and Conditions).
7. General Terms and Conditions: Shipping and return policies and procedures,
credit card processing procedures, electronic interfacing protocols,
representations and warranties, choice of law provisions, etc., are all as
contained in the General Terms & Conditions attached, and such terms and
conditions are an integral part of this Agreement.
8. AEC authorizes the following Electronic Commerce Web Site for the use of
the AEC DATABASE(S).
(i) Web Site Domain Name xxx.xxxxxx.xxx
(ii) Web Site Platform (NT/Unix)
(iii) Web Internet Provider
(iv) Internal I.P. Address
(v) Estimated beta test date
(vi) Estimated Launch date April 5, 1999
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Please execute this Agreement below, and return the countersigned
Agreement(s) (together with your check for the start-up fees) to AEC.
Agreed:
Company Name: XXXXXX.XXX, INC. AEC ONE STOP GROUP, INC.
-------------------------------
Name: Xxxx Xxxxxxxx
------------------------------- ----------------------------
Individual signing Individual signing (Please
(Please print) print)
Signature:
------------------------------- ----------------------------
Title: President/CEO
------------------------------- ----------------------------
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S:\Legal\AMG\SMDGroup\CDBeat-dtbase-CDF-music 040599 CONFIDENTIAL
GENERAL TERMS & CONDITIONS
FOR THE DATABASE LICENSE AND
CONSUMER DIRECT FULFILLMENT SERVICES AGREEMENT
1. BACKGROUND.
1.1 COMPANY (as identified in the cover sheet hereto) is engaged in the
business of selling prerecorded audio products in all formats and related
products, by offering to individual consumers ("Customers") an interactive
retail purchasing service on an Internet web site or via any other substantially
equivalent electronic mechanism or mechanisms (i.e. an "On-Line Store");
1.2 COMPANY desires that AEC provide the database and fulfillment services
required to fulfill orders received from Customers.
1.3 AEC compiles a general interest music guides containing, among other
things, lists of artists, albums, ratings, reviews and other information, which
is published under the trade name "All-Music Guide", using the "AMG" and
"MATRIX" logos and marks. In addition, AEC compiles a database which provides
information regarding the availability and pricing of record products (the "AEC
Availability File"). The AEC Availability File and the All-Music Guide, as
published in electronic form, shall be referred to collectively herein as the
"DATABASES;"
1.4 AEC is in the business of wholesaling and fulfilling orders for audio
products.
2. AEC Services; Database and Fulfillment.
2.1 Database Services.
2.1.1 General License. AEC hereby grants to COMPANY a non-exclusive
license, without the right of sublicense, to use each of the latest versions and
releases of the DATABASES, along with the DATABASE programs and data contained
therein, including all future revisions, enhancements and updates of the
DATABASES in accordance with the terms of this Agreement, and COMPANY agrees to
use the licensed DATABASES solely for the purposes of marketing and selling
products secured from AEC (via the fulfillment services provided for herein) and
sold via COMPANY's On-Line Store.
2.1.2 Specific Services:
2.1.2.1 AEC shall provide COMPANY with the DATABASES, and with
updates of the DATABASES not less frequently than monthly so as to make the
information contained in the DATABASES current and complete to the same extent
as the versions of the DATABASES which are current at the time the Agreement is
executed, which versions have been reviewed by COMPANY, except that with respect
to the AEC Availability File, AEC shall be updated daily or weekly, as mutually
agreed by AEC and COMPANY. AEC shall deliver to COMPANY pursuant to this
Agreement, one (1) copy of the current DATABASES no later than fourteen (14)
days (unless otherwise agreed upon by both parties) after the execution of the
Agreement, and thereafter AEC shall deliver to COMPANY one (1) updated copy of
updates of the DATABASES no later than the fifth day of each month (unless
otherwise agreed upon by both parties) in a format to be mutually agreed upon.
Delivery shall be by FTP pick-up, at a designated site for COMPANY's site,
unless otherwise agreed by the parties. Any expenses for any other method of
delivery shall be borne by COMPANY.
2.1.2.2 AEC shall update, edit, compile or create new data
files for the DATABASES, including the linking of the DATABASES to third party
audio databases that contain UPC bar codes if approved by AEC; but in such case
COMPANY must deliver to AEC the complete databases of such third parties and
such databases must contain accurate UPC bar codes for all formats (cassette,
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laser discs, etc.). If COMPANY requires additional linking beyond the UPC bar
code, at the option of COMPANY this can be arranged for a fee to be agreed upon
by COMPANY and AEC.
2.1.2.3 AEC shall provide appropriate maintenance and support
for the DATABASES to COMPANY personnel.
2.1.2.4 AEC shall have access to COMPANY's databases as necessary to
perform the AEC linking services. AEC shall have reasonable access to staff and
support services personnel in order to assist in making the DATABASES
functional. In the event that COMPANY fails to comply with its obligations under
this Section 2.1.2.4 after fifteen (15) days prior written notice from AEC to
COMPANY, to the extent that AEC is made incapable of performing by such
noncompliance, AEC's obligation to perform shall be suspended for the duration
of such noncompliance; however, this Agreement shall in such event remain in
full force and effect in all other respects.
2.1.3 Title, Delivery and Copies.
2.1.3.1 COMPANY acknowledges and agrees that the
DATABASES and all revisions, modifications and enhancements thereof provided by
AEC to COMPANY under this Agreement are the exclusive and proprietary
information of AEC. Title and full ownership rights thereto, including but not
limited to copyright, trade secret, trademark, trade name and other intellectual
and proprietary rights, are reserved to, and shall remain with and be the
valuable property of AEC. COMPANY acknowledges the valuable, proprietary nature
of the DATABASES, including all revisions, modifications and enhancements
thereof, and agrees that irreparable injury will result from any use,
disclosure, reproduction or distribution of the DATABASES that is not authorized
by this Agreement and agrees not to contest in any way whatsoever the
proprietary status of the DATABASES or AEC's subsisting copyrights therein.
COMPANY will not remove any proprietary or confidential legends or markings
which AEC has placed upon or within the DATABASES.
2.1.3.2 COMPANY acknowledges that AEC may, at any time or
times during the term of this Agreement, substitute a new version of the
DATABASES for the version of the DATABASES originally provided hereunder; in
which case the license granted COMPANY shall cease with respect to the replaced
version of the DATABASES, and COMPANY shall purge all copies of the replaced
version from COMPANY's computer system and from any other computer storage
device or medium as to which COMPANY has or should have control consistent with
this license.
2.2 Fulfillment Services.
AEC shall supply to Customers the Products offered over COMPANY's On-Line
Store and ordered by the Customers (unless "Commercially Unavailable" as
provided below); and in connection therewith AEC shall perform the fulfillment,
technical, and professional services described below.
2.2.1 AEC Fulfillment Services Defined.
2.2.1.1 Internet Fulfillment Site. - AEC will interface with
COMPANY's Internet fulfillment site (or equivalent) in one of the following
methods, as mutually agreed:
(i) Standard EDI file transmission to and from COMPANY and
AEC. Orders will be sent to AEC at mutually agreed pre-determined intervals.
Orders may be transmitted via the Internet (FTP) , X. 12, an AEC bulletin board
or another mutually agreed method.
(ii) Advanced on-line connectivity in order to query or commit for
Customers in real time fulfillment. AEC will provide an API Library and/or code
to implement the connection between Unix to Unix or NT to Unix systems. Custom
programming on COMPANY's web site to interface with AEC is the responsibility of
COMPANY.
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AEC will provide COMPANY with access to an AEC web site location to query and
maintain order status and returns authorizations directly from the AEC
fulfillment computer system.
2.2.1.2 Processing Orders; Shipping Product. AEC shall, upon
AEC's receipt of a Verified Order (as hereinafter defined), (i) process such
order and (ii) arrange to have the Ordered Product (as hereinafter defined)
shipped to the Customer. All orders will be quality controlled through advanced
sorting and UPC verification methods. AEC will have no obligation to accept
orders for or to ship any item of Product which is Commercially Unavailable (as
hereinafter defined).
"Commercially Unavailable": A particular item is Commercially Unavailable if, at
the time the order for such item is received by AEC or during the process of
such order being fulfilled, such item is not in the inventory of AEC (at AEC's
sole commercial discretion) and (a) is no longer manufactured; (b) is not
reasonably available to AEC from the company that releases such product; or (c)
has been deleted from the catalog of the company that releases such items. To
the extent such a product is Commercially Unavailable and COMPANY can assist in
AEC achieving availability, and AEC requests such assistance, COMPANY shall use
its good faith efforts to so assist.
"Ordered Product" shall mean the units of product ordered by a Customer with a
Verified Order.
"Verified Order" means an order that provides all of the information specified
in AEC technical documents and which has been authorized by AEC's or Company's
credit card contractor to be debited from the consumer's account. Technical
requirements include, but are not limited to, valid account, address, credit
card information and product related information. The AEC credit card or Company
credit card verification validates the consumer's payment capability.
2.2.1.3 Stickering or Other Special Handling. There will be no
additional charge for stickering or any other COMPANY identification label as
long as there is no more than one label per unit and it is compatible with AEC's
material and handling technology. In addition, AEC, at no charge, will insert
promotional materials on behalf of COMPANY with each shipment subject to the
understanding that all AEC costs reasonably associated with the inserts shall be
borne by COMPANY, and that each insert has a valid UPC code or similar number.
Finally, all special handling considerations shall be reviewed during formal
operations meetings and it is understood that AEC and COMPANY shall negotiate,
in good faith, as to the cost, if any, which will be charged for such special
handling.
2.2.1.4 Account Representatives. AEC will make available
account representatives who will be responsible for using reasonable efforts to
meet all customer service, product sales, and technological needs.
2.2.1.5 Two-way Interaction. AEC will communicate
interactively (batch or on-line) with COMPANY in an agreed method to provide
electronic updates on orders shipped, including shipping methods, tracking
numbers, fill, invoice totals, and all pertinent data reasonably requested by
COMPANY.
2.2.1.6 Retailer Packaging Identification. AEC shall be an
invisible fulfillment arm. AEC will produce custom invoices, shipping labels and
packaging consistent with AEC technologies and capabilities that will accompany
an order to identify the product/order as from COMPANY.
2.2.1.7 Credit Card Processing. Customer's credit card orders shall be
processed in one of the following manners (check one):
_____ COMPANY shall, using its own merchant account number,
process all credit card orders without any credit card processing assistance
from AEC. All costs related thereto shall be borne by COMPANY. Each CDF order
received by AEC from COMPANY will be processed for shipment by AEC, and AEC
assumes no role in the consumer level verification, and settlement of individual
consumer credit cards.
X Using COMPANY's merchant account number, AEC shall perform
all credit card processing functions at no additional cost above fees charged by
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third parties (e.g., the merchant bank, credit card clearinghouse and online
cyber processing center); there shall be no processing charge paid to AEC by
COMPANY for handling this process.
2.2.2 Performance Standards for AEC.
2.2.2.1 Fill Standards - AEC represents that each fill
percentage over any mutually agreed upon measurement period shall be 90% on
commercially available audio product if ordered via AEC's on-line real time
communication and commitment system and 80% if ordered via batch communication
(excluding, however, cut-outs, commercially unavailable product, imports and
selected product not available from vendors).
2.2.2.2 Shipping Standards - 95% of all product orders (unless
"Commercially Unavailable" as provided in above) shall be shipped from an AEC
facility within cut-off times to be reasonably mutually determined from time to
time consistent with Section 2.2.3 below.
2.2.3 Shipping & Return Procedures.
2.2.3.1 Shipping. Daily cut-off times should be reasonably
mutually determined from time to time, but, currently, same day service can be
offered until 1:00 PM EST. Current methods of shipment include: United States
Postal Service and United Parcel Service. AEC shall offer to COMPANY the full
range of shipping options to Customers of COMPANY at no additional cost above
fees normally charged by the shipping carriers.
COMPANY acknowledges that the shipping rates charged to AEC by its
shipping carrier represent leveraged pricing at rates significantly below
published rates. COMPANY agrees that such shipping rates constitute Confidential
Information of AEC under this Agreement, subject to the provisions of Section 4
hereof.
2.2.3.2 Returns. COMPANY shall assume and pay for all shipping
and other costs incurred in the return, refused and undeliverable, or exchange
of Ordered Product. Notwithstanding the foregoing, AEC shall be responsible for
all Ordered Product either incorrectly shipped to a Customer or damaged while in
transit to the Customer, but only if such Ordered Product was shipped via an
insured and traceable carrier. In such cases, AEC shall assume and pay for all
shipping and other costs incurred in the return or exchange of Ordered Product
and will ensure that COMPANY incurs no product cost for the involved
transaction.
2.2.4 Prices, Costs, Fees.
2.2.4.1 Fulfillment Prices. AEC shall initially price Products
at the standard one-stop published prices (the "Fulfillment Prices"), which may
be increased or decreased from time to time (e.g., when the manufacturers of
Product change their list prices to AEC). The Fulfillment Prices as of the date
of this Agreement are set forth in Exhibit I hereto. The lower of the two prices
reflected on such Exhibit I for Product sold hereunder is the amount to be
retained by or paid to AEC hereunder for such sales.
2.2.4.2 Shipping Costs; Credit Card Processing. In addition to
the Fulfillment Prices, COMPANY shall pay the costs of credit card processing,
packaging materials and shipping costs required to ship the Products to the
Customer.
3. COMPANY RESPONSIBILITIES.
COMPANY shall cooperate with AEC as required by this Agreement and shall
perform the responsibilities described in this Agreement, including
particularly, but without limitation, those more specifically described below:
3.1 Technical Cooperation. COMPANY shall cooperate with AEC to develop the
technical linkages between COMPANY's Internet fulfillment site and the
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DATABASES. If COMPANY requires the technical assistance and resources of AEC's
information technology experts beyond a "reasonable amount" (as reasonably
determined by AEC), then all such excess hours shall be charged at the then
current rates of AEC's affiliated information technology consulting services
group. Such rates at January 1, 1998 were $110 per hour.
3.2 Feedback with Customers.
3.2.1 COMPANY shall handle all end-user customer service. COMPANY
shall respond promptly and professionally to Customers' questions regarding the
procedure for ordering Products and any other questions regarding their orders.
In communicating with AEC in connection with Customer's inquiries, COMPANY shall
use e-mail or other on-line connectivity to AEC whenever reasonably possible.
3.2.2 COMPANY will provide a feedback area on the Service where
users can notify COMPANY of corrections, additions, errors, and other comments
about the Databases and to forward those comments to the All-Music Guide Staff.
3.3 Faulty Information. COMPANY shall reimburse AEC for all shipping and
other costs incurred with respect to the processing of an order if COMPANY
caused information, other than the correct order information (as provided by a
customer), to be provided to AEC.
3.4 Minimum sales. COMPANY guarantees that Customers shall purchase a
minimum of $25,000 in net purchases per month during the Term beginning with the
first calendar month commencing after the ninetieth day (i.e., start-up period)
of the Term. The failure of Customers in any month, beginning with such first
month, to make such monthly minimum purchase may be deemed (at AEC's option) a
material failure by COMPANY to perform its obligations hereunder.
3.5 Payment, Reports and Audits.
3.5.1 AEC shall invoice COMPANY for its CDF fulfillment services
(included the costs related thereto and as provided herein) twice each month for
the preceding invoiced period. COMPANY shall pay each invoice within fifteen
(15) days of receipt thereof.
3.5.2 COMPANY shall provide AEC, within thirty (30) days after each calendar
month, a summary sales report detailing COMPANY's Net Sales of products pursuant
hereto during each calendar month, which report shall be a basis, inter alia,
for the calculation of COMPANY's monthly sales (and the License Fee derived
therefrom).
3.5.3 Credit Limit/Late Payment. COMPANY shall not exceed its credit limit of
$5,000, unless COMPANY has concluded financial arrangement in writing with AEC's
Credit Department, satisfactory to AEC in its sole discretion. Nonetheless, any
payments not received by AEC when due shall, at AEC's election, carry finance
charges as follows: AEC will compute interest on the unpaid balance at the lower
of either one and one half (1-1/2%) percent per month, which is an annual rate
of eighteen (18%) percent, or at the highest rate permitted by applicable law.
3.5.4 All payments and reports shall be sent to AEC at the following address:
AEC One Stop Group, Inc., 0000 Xxxxx Xxxxx Xxxxx, Xxxxx Xxxxxxx,
Xxxxxxx 00000, Attention: ACCOUNTS RECEIVABLE DEPT.
3.5.5 AEC, shall have the right to inspect the books and records of COMPANY
wherever the same may be, insofar as said books and records pertain to the
royalties payable to AEC hereunder. Such examination shall take place during
normal business hours, at COMPANY's place of business, upon reasonable notice to
COMPANY, at AEC's sole cost and expense, and not more than once per calendar
year. Any such inspection must be undertaken within two years after the end of
the calendar year being inspected.
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4. CONFIDENTIALITY AND PROPRIETARY RIGHTS.
4.1 During and following the term hereof, each party to this Agreement
expressly undertakes to retain in confidence, and to require and cause its
subsidiaries and affiliates and its and their respective employees, contractors
and agents to retain in confidence, all information and know-how transmitted to
such party (the Receiving Party) (i) which the disclosing party hereunder (the
Disclosing Party) has identified in writing as being proprietary and/or
confidential or (ii) which the Receiving Party reasonably should know, based
upon the nature of the information being disclosed, ought to be treated as
confidential (collectively "Confidential Information"). The Receiving Party will
make no use of such Confidential Information except as expressly authorized
under this Agreement. Either party may, however, disclose Confidential
Information if required by law, provided such Party shall give the other
reasonable notice prior to such disclosure and shall comply with any applicable
protective order or equivalent. Under no circumstances shall a Disclosing Party
be entitled to terminate this Agreement for an alleged unauthorized use or
disclosure by the Receiving Party of Confidential Information which was not
marked as "confidential" or "proprietary" unless such disclosure was made in bad
faith (in which case the Disclosing Party may terminate this Agreement to the
extent permitted under Section 7 herein).
4.2 Without limiting the generality of Section 4.1, the parties agree that
the following information disclosed by one party to the other shall be deemed
Confidential Information: the capabilities, technical descriptions and source
code relating to either party's released or unreleased software or hardware
products or services; the marketing or promotion plans of any product or service
of either party; either party's business policies or practices; and information
received from others that either party is obligated to treat as confidential.
4.3 Without limiting the foregoing, COMPANY agrees that the DATABASES and
all information contained therein and/or provided by AEC hereunder, including
but not limited to database layouts, schema, algorithms and linking and other
program features, are and shall be treated as the Confidential Information.
COMPANY agrees not to copy, disclose or otherwise make available the DATABASES,
in any form, to any person for any purpose other than as necessary to permit
COMPANY's use of the DATABASES as authorized herein. Any copies or reproductions
of the Confidential Information shall bear the "AMG" logo and any other patent,
copyright, trademark or proprietary notices contained in the original or as
reasonably required by AEC. COMPANY shall take all reasonable steps to safeguard
the DATABASES against unauthorized disclosure. COMPANY also agrees not to use
such Confidential Information except as authorized under this Agreement, and, in
particular, without limiting the foregoing, shall not use such information to
develop a product that would be competitive with the DATABASES.
4.4 Both parties acknowledge that unauthorized disclosure or use of
Confidential Information could cause irreparable harm and significant injury
which may be difficult to ascertain. Accordingly, both parties agree that the
aggrieved party will have the right to seek and obtain injunctive relief from
breaches of this Section 4, in addition to any other rights and remedies it may
have. Both parties agree that each has and shall retain ownership rights to its
own Confidential Information, and that upon expiration or termination of this
Agreement each party shall return and shall not retain the Confidential
Information of the other party.
4.5 Notwithstanding anything in this Section 4 to the contrary,
Confidential Information shall not be construed to mean any information which
the Receiving Party can show: (i) is, or subsequently becomes, publicly
available other than as a result of the Receiving Party's breach of any
obligation owed to the Disclosing Party or a third party; (ii) became known to
the Receiving Party prior to the Disclosing Party's disclosure of such
information to the Receiving Party, (iii) became known to the Receiving Party
from a source other than the Disclosing Party other than as a result of such
source's breach of an obligation of confidentiality owed to the Disclosing
Party, (iv) is independently developed by the Receiving Party, or (v) has been
authorized for disclosure by the Disclosing Party.
4.6 The provisions of this Section 4 shall survive termination or
expiration of this Agreement.
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5. WARRANTIES AND REPRESENTATIONS.
5.1 By AEC.
5.1.1 Generally. AEC warrants and represents for the benefit of
COMPANY as follows: (i) the AEC Services will be rendered in accordance with all
requirements identified in this Agreement, (ii) AEC has all rights, licenses and
authorizations required to enter into and perform this Agreement, and the
performance by AEC of its obligations pursuant to this Agreement will not
violate any United States federal, state or municipal laws, rules, regulations
or ordinances or the provisions of any agreement to which AEC is a party or by
which AEC is bound; and (iii) any reports to be delivered to COMPANY hereunder
will be complete and accurate to the best of AEC's knowledge.
5.1.2 Databases. AEC represents and warrants that AEC (and its
affiliates) is the rightful owner and/or licensor of the DATABASES, including
the copyrights, trademarks, trade names or other property rights contained
therein and being licensed herein by AEC. Notwithstanding the foregoing, AEC
does not warrant that it owns any rights to the Images required for COMPANY to
use such Images for any application. It shall be COMPANY's sole responsibility
to identify and solicit any necessary approvals for its use of the Images. AEC
and MATRIX shall not be liable for any indirect, special, incidental, exemplary,
consequential or other loss or damages arising out of or caused by the
licensing, delivery, installation or operation of the Images.
5.2 By COMPANY. COMPANY warrants and represents for the benefit of AEC as
follows: (i) COMPANY Responsibilities and promises herein will be rendered in
accordance with all requirements identified in this Agreement; (ii) COMPANY has
all rights, licenses and authorizations required to enter into and perform this
Agreement, and the performance by COMPANY of its obligations pursuant to this
Agreement will not violate any United States federal, state or municipal laws,
rules, regulations or ordinances or the provisions of any agreement to which
COMPANY is a party or by which COMPANY is bound; (iii) all orders for Products
conveyed to AEC shall be accurately conveyed to AEC including, as to each order,
all information in the form provided by any Customer; and (iv) COMPANY has the
all necessary rights to sell Products to Customers. Without limiting any of the
terms of this Agreement, COMPANY expressly agrees that it will not, during the
terms of this Agreement, or at any time thereafter, use the DATABASES to create
similar databases, either for COMPANY's own use or for the use of any third
party.
5.3 Survival. The representations and warranties contained in this Section
5 are continuous in nature and shall be deemed first given upon the execution of
the Agreement and shall survive termination or expiration of this Agreement.
6. INDEMNIFICATION.
6.1 By AEC. AEC shall indemnify, hold harmless and defend COMPANY and all
of COMPANY's employees, officers, directors and agents from and against any and
all claims, damages, losses, liabilities, suits, actions, demands, proceedings
(whether legal or administrative) and expenses (including but not limited to
reasonable attorneys' fees incurred, with or without suit, in arbitration or
mediation, on appeal or in a bankruptcy or similar proceeding) (collectively,
"Claims") threatened, asserted or filed by a third party against any of the
aforesaid persons or entities to the extent that such third party Claims arise
out of or relate to (i) the breach of any material warranty, representation or
agreement made by AEC in this Agreement; or (ii) any grossly negligent or
tortious act, willful misconduct or willful omission by AEC; provided, however,
the foregoing indemnity obligation shall be binding if, and only to the extent
that, the Claim at issue does not arise out of or relate to a matter in respect
of which AEC is entitled to indemnification under Section 6.2 below and
provided, further, that AEC shall not be liable for any errors, omissions or
inaccuracies in the DATABASES, or the updates thereof unless caused by AEC's
gross negligence or willful neglect. Furthermore, AEC shall not be liable for
any delays or interruptions in the delivery, transmission or distribution of the
DATABASES or the updates by reason of unavoidable equipment failure,
communication circuit failure, power failure, Acts of God, government
intervention, fire, flood, or other Acts beyond AEC's reasonable control. Any
COMPANY modification of the DATABASES or any failure by COMPANY to implement any
enhancements, improvements, or updates to the DATABASES as supplied by AEC shall
void the indemnity under Section 6.1 of this Agreement.
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6.2 By COMPANY. COMPANY shall indemnify, hold harmless and defend AEC and
all employees, officers, directors and agents of AEC from and against any and
all subpoenas served, and/or Claims threatened, asserted or filed by a third
party against any of the aforesaid persons or entities to the extent that such
third party Claims arise out of or relate to: (i) the breach, or alleged breach,
of any material warranty, representation or agreement made by COMPANY in this
Agreement; (ii) any grossly negligent or tortious act, willful misconduct or
willful omission by COMPANY; or (iii) COMPANY's use of the Images. The foregoing
indemnity obligation shall be binding if, and only to the extent that, the Claim
at issue does not arise out of or relate to a matter in respect of which COMPANY
is entitled to indemnification under Section 6.1 above.
6.3 Manner of Exercise. Any person or entity that is entitled to be
indemnified pursuant to this Section 6 ("Indemnified Party") must give prompt
notice to the indemnifying party (the "Indemnifying Party") in writing of the
occurrence of the Claim for which indemnity is requested and, at the option of
the Indemnifying Party, the Indemnifying Party may assume the handling,
settlement and defense of such Claim, in which event the Indemnified Party will
cooperate in all reasonable respects with the Indemnifying Party at the
Indemnifying Party's expense. The Indemnifying Party shall reimburse the
Indemnified Party on demand for any payment made by the Indemnified Party in
respect of any Claim to which the foregoing indemnity relates which either (i)
has resulted in an adverse judgment against the Indemnified Party or (ii) has
been settled with the written consent of the Indemnifying Party, which it may
withhold for any reason.
7. DEFAULT AND TERMINATION.
7.1 Default. In the event of a default (a "Default"), the non-defaulting
party shall have the right to terminate this Agreement by giving notice to the
other party under this Agreement and of its election to terminate this
Agreement, after the non-defaulting party becomes aware of such Default. Each of
the following is a Default:
(i) The failure of either party to materially perform any of such party's
obligations contained in this Agreement, which failure has not been cured within
ten (10) days, in the case of a breach in any payment obligation hereunder, or
thirty (30) days, in the case of a breach in any other kind of obligation
hereunder, after the non-breaching party provides notice to the breaching party
describing the breach(s) in reasonable detail. The failure of AEC to meet any of
its Performance Standards contained in Section 2.2.2 above (which Performance
Standard has been measured and averaged over a calendar month) shall not be
deemed material unless AEC shall fail to meet such Performance Standard by a
margin greater than fifteen percentage points (15%) in any month.
(ii) Notwithstanding anything to the contrary in Section 7. 1 (i) , the
failure of AEC to meet any of its Performance Standards (which Performance
Standard has been measured and averaged over a calendar month) shall not be
deemed material during any "Surge Month" (as hereinafter defined) , except as
provided in this Section 7.1(ii). A "Surge Month" shall be deemed to have
occurred when the average daily order volume for any calendar month (measured by
the number of discrete orders placed, not the total number of Products ordered)
(the "Average Daily Order Volume") exceeds the average of the previous two (2)
calendar months Average Daily Order Volume by at least twenty-five percent
(25%). If in any Surge Month AEC shall fail to meet any of its Performance
Standards by a margin greater than twenty percentage points (20%), then AEC
shall be in Default.
(iii) The occurrence of any of the following: (a) any party admits in
writing its inability to pay its debts generally or makes a general assignment
for the benefit of creditors; (b) any affirmative act of insolvency by any party
filing by any party of any petition or action under any bankruptcy,
reorganization, insolvency, arrangement, liquidation, dissolution or moratorium
law, or any other similar law or laws for the benefit of, or relating to,
debtors; (c) the filing, by any third party, against any party of any petition
or action of the type described in clause (b) above, which has not been either
controverted by such party within fifteen (15) days after its receipt of the
service of process dating to such filing, or stayed or dismissed within thirty
(30) days after the time of such receipt; (d) the subjection of a material part
of any party's property to any levy, seizure, assignment or sale for or by any
creditor, third party or governmental agency, provided that such levy, seizure,
assignment or sale has not been stayed, discharged or reversed within thirty
(30) days after the date of issuance of the order or decree which authorized the
same; or (e) the issuance of an injunction enjoining either party from
performing any of its material obligations hereunder, which injunction has not
been stayed, discharged or reversed within thirty (30) days after the date of
issuance of the order or decree which authorized the same.
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7.2 Effect of Default. If there is a Default, this Agreement shall terminate and
the parties shall have all rights and remedies provided in this Agreement upon
termination in addition to those rights and remedies it may have under law or
equity, subject to Section 8 hereof.
7.3 Effect of Termination. Upon the expiration or termination of this
Agreement for any reason whatsoever the license granted to COMPANY hereunder
shall immediately terminate and all rights of the COMPANY with respect to the
AMG Databases shall immediately cease. COMPANY shall purge all copies of the AMG
Databases from COMPANY'S computer system and from any other computer storage
device or medium on which COMPANY has placed the AMG DATABASES and an officer of
COMPANY shall certify in writing to AEC to such cessation and destruction.
8. LIMITATION OF LIABILITY.
NEITHER OF THE PARTIES HERETO SHALL HAVE ANY LIABILITY TO THE OTHER PARTY HERETO
OR TO ANY THIRD PARTY FOR ANY INDIRECT, SPECIAL, CONSEQUENTIAL, EXEMPLARY OR
INCIDENTAL DAMAGES ARISING UNDER THE TERMS OF THIS AGREEMENT, EVEN IF ADVISED IN
ADVANCE OF THE POSSIBILITY OF SUCH DAMAGES. The foregoing shall not be
interpreted to limit any party's right to be fully indemnified to the extent
provided under Section 6 for damages claimed by a third party. COMPANY
acknowledges that nothing in this Agreement shall be deemed to establish a
contractual or other legally recognizable relationship between AEC and a
Customer, it being agreed that the services provided hereunder are for COMPANY's
benefit and as agent for COMPANY. COMPANY shall be responsible for ensuring
compliance with all laws and regulations governing the sale and distribution of
Product as described herein.
9. FORCE MAJEURE.
Except for obligations under Section 4 (Confidentiality) and obligations of
payment, the executory obligations of the parties hereunder shall be excused to
the extent, but only to the extent, delayed or prevented by Acts of God,
including, without limitation, earthquake, storm, flood, fire, explosion, power
failure, civil insurrection, or any other cause beyond the reasonable control of
the affected party hereto and which such party could not by reasonable diligence
have avoided (collectively, "Force Majeure"), provided that written notice of
such Force Majeure is given by the affected party to the other within twenty
(20) days of such party's becoming affected by the Force Majeure. Furthermore,
in the event such notice is timely given, no failure or delay by either party in
the performance of any of its obligations (other than Confidentiality
obligations) as a result of a Force Majeure shall give rise to any liability to
the other party for any loss, injury, delay, or other casualty suffered or
incurred by such other party due to such Force Majeure. The party directly
affected by a Force Majeure shall use all reasonable efforts to minimize the
effects of the same. At the election of the party not directly affected by a
Force Majeure, a period of time equal to the duration of any suspension of
performance by the other party as a result of a Force Majeure shall be added to
the end of the then current term of this Agreement, and such term shall be
accordingly extended.
10. TRADEMARKS/COPYRIGHT NOTICES.
10.1 COMPANY agrees that AEC shall be entitled to include one of its
All-Music Guide trademarks and/or service marks with an associated design or
logo (individually and collectively, the "AEC Marks") on the presentation of
AEC's DATABASE information (e.g., page view, discography listing, biography,
album review, album track listing, etc.) within the On-Line Store during the
Term. Such presentations shall be determined by AEC in its sole discretion, but
subject to COMPANY's prior written approval, which approval shall not be
unreasonably withheld or delayed. Without limiting the foregoing, it is
understood by both parties, that best positioning of the AEC Marks within the
On-Line Store is best determined by AEC, and COMPANY agrees that the common goal
with respect to AEC's Marks displayed on the On-Line Store is to inform the
viewer that the data viewed has been provided by AEC. The acceptable forms of
markings for the DATABASE information, as well as the copyright notices that
must appear with the presentation of the DATABASE information, are set forth on
Exhibit II- Trademark Specifications and Copyright Notices.
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During the term of the Agreement, COMPANY grants AEC a limited license to
use the Company Marks in promotional materials, provided that both parties have
mutually approved of such materials in writing, which approval shall not be
unreasonably withheld or delayed. Nothing contained in this Agreement shall be
construed as an assignment or grant to AEC of any right, title or interest in or
to Company Marks other than such promotional use, and in the carrying out of AEC
obligations hereunder. All rights relating to the Company Marks are expressly
being reserved by COMPANY, except for the limited license granted above to AEC,
and all good will associated with Company Marks inures to the benefit of
COMPANY.
10.2 The COMPANY acknowledges that AEC is the sole owner of all right,
title and interest in the AEC Marks but not the COMPANY Marks. Nothing contained
in this Agreement shall be construed as an assignment or grant to COMPANY of any
right, title or interest in or to the AEC Marks. All rights relating thereto are
expressly being reserved by AEC, except for the limited licenses granted to
COMPANY above, and all good will associated with the AEC Marks inures to the
benefit of AEC.
10.3 For the avoidance of doubt, nothing contained in the foregoing
provisions of this Section 10 shall be construed to supersede the requirements
that AEC reproduce and display such logos and any copyright notices as relate to
the DATABASES. During the term of the Agreement, parties agree that the AMG
logos shall appear prominently in all promotional materials prepared by either
party, whether or not the AEC Marks or the Company Marks appear.
11. General.
11.1 Each party acknowledges that it has read this Agreement, understands
it, and agrees to be bound by its terms. This Agreement represents the entire
understanding of the parties with respect to the subject matter hereof and
supersedes all prior agreements, negotiations, understandings, representations,
statements and writings among the parties relating thereto with regard to the
subject matter hereof. No modification, alteration, waiver or change in any of
the terms of this Agreement shall be valid or binding upon the parties hereto
unless made in writing and duly executed by both of the parties hereto.
11.2 This Agreement shall be governed by and interpreted in accordance
with the laws of the State of Florida and the United States of America, without
regard to the principles of conflicts of law. The parties hereby consent to and
submit to the sole jurisdiction of a competent court located in the State of
Florida. Such court shall be the sole and exclusive venue for resolution of any
disputes or disagreements between the parties relating to this Agreement or the
transactions contemplated hereby or otherwise arising hereunder or with respect
to any breach of the terms and provisions hereof.
11.3 Should any part of this Agreement be held unenforceable or in
conflict with the applicable laws or regulations of any jurisdiction, the
invalid or unenforceable part or provision shall be replaced with a provision
which accomplishes, to the extent possible, the original business purpose of
such part or provision in a valid and enforceable manner, and the remainder of
this Agreement shall remain binding upon the parties.
11.4 Each of the parties hereby covenants and represents to the other that
neither the execution and delivery of this Agreement nor the performance of the
transactions contemplated hereby will cause a breach under, or violate
provisions of, any other agreement to which it is a party or by which its assets
are or may be bound. This Agreement and all obligations and rights herein shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns.
11.5 This Agreement is not intended to create any relationship other than
AEC as an independent contractor performing services covered by this Agreement,
and COMPANY as the party contacting with AEC for those services. No party is a
partner or a legal representative of the other for any purpose whatsoever. No
party is authorized to make any contract, agreement or warranty on behalf of any
other party. Under no circumstance shall one party's employees be construed to
be employees of any other party.
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11.6 All notices given to the parties hereunder and all statements and
payments hereunder shall be addressed to the parties at the address set forth
below or at such other address as shall be designated by the parties in writing
from time to time:
If to COMPANY: To Name and Address Indicated on Cover Page hereto
If to AEC: with a copy to:
AEC One Stop Group, Inc. Alliance Entertainment Corp.
0000 Xxxxx Xxxxx Xxxxx 0000 Xxxxx Xxxxx Xxxxx
Xxxxx Xxxxxxx, Xxxxxxx 00000 Xxxxx Xxxxxxx, Xxxxxxx 00000
Attn: Xxx Xxxxxxx Attn: General Counsel
All notices shall be in writing and shall be personally delivered, or served by
certified mail, return receipt requested, or by overnight mail service such as
Federal Express, all charges pre-paid. Except as otherwise provided herein, such
notices shall be deemed given three days after mailing or delivery to an
overnight mail service, all charges prepaid, except that notices of change of
address shall be effective only after actual receipt thereof. The failure of the
recipient to accept or receive notice given by certified mail, return receipt
requested, postage pre-paid, does not affect the validity of the notice.
11.7 The terms and provisions of this Agreement that by their sense and
context are intended to survive the performance of such term or provision or of
this Agreement shall so survive the completion of performance and termination of
this Agreement, including without limitation the provisions of Sections 4, 5 and
6 hereof.
11.8 Waiver by either party of a default or breach or a succession of
defaults or breaches, or any failure by either party to enforce any rights
hereunder, shall not be deemed to constitute a waiver of any subsequent default
or breach with respect to the same or any other provision hereof, and shall not
deprive such party of any right to terminate this Agreement arising by reason of
any subsequent default or breach.
11.9 The captions used in this Agreement are for convenience of reference
only and are not to affect the construction hereof or be taken into
consideration in the interpretation hereof.
11.10This Agreement may be executed in one or more counterparts each of
which shall be deemed an original but all of which taken together shall be
deemed one and the same instrument.
End of General Terms & Conditions
Company Name: AEC ONE STOP GROUP, INC.
XXXXXX.XXX, INC.
-------------------------------
Name: Xxxx Xxxxxxxx
------------------------------- --------------------------
Individual signing (Please Individual signing (Please
print) print)
Signature:
------------------------------- ---------------------------
Title: President/CEO
------------------------------- ---------------------------
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EXHIBIT II
*Pricing Confidential
EXHIBIT II
Trademark Specifications and Copyright Notices
ALL-MUSIC GUIDE:
The following DATABASE information will be marked with the following All
Music Guide logo and branding: Artist Biographies, Essays, and Album Reviews
will be marked "AMG Biography" and "AMG Review," and "AMG Essay". After each
biography and album review, the name of the author, and the term "AMG" will be
listed. Ratings will be marked "AMG Ratings", relational elements such as the
following will be marked as: "AMG Roots & Influences", "AMG Similar/Related
Artists", "AMG Music Maps", "AMG Track Listings" and "AMG Similar Albums".
Set forth on the following pages are examples of the presentations of the All
Music DATABASE elements, and copyright notices, which are pre-approved by AEC.
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