EXHIBIT 10.11
Page 1
AEC ONE STOP GROUP, INC.
DATABASE LICENSE AND
CONSUMER DIRECT FULFILLMENT SERVICES AGREEMENT
1. PARTIES: This Database License and Consumer Direct Fulfillment Services
Agreement is being entered into as of this ___ day of November , 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 XxxxxXxxxxxx.Xxx, a California
Corporation, with its principal place of business located at 00000 Xxxxxxx
Xxxxxx, Xxxxxxxxx, XX 00000, as an Interactive Retailer (as an "on-line"
store or otherwise similarly), hereafter referred to as ("COMPANY" or
"your" or "you").
2. SERVICES: AEC will (i) supply COMPANY with use of AEC's All-Music Guide and
AEC's All-Movie Guide in electronic form (the "Databases"), (ii) supply
COMPANY with updating and general service with regard thereto, (iii)
perform as the wholesale provider (i.e., fulfillment) of the musical
recordings and related products which COMPANY sells via its Interactive
Retailing to its customers and (iv) fulfill consignment product orders by
shipping directly to such customers (the "Products"). Particulars of such
services and performance standards are set forth in General Terms &
Conditions Agreement attached.
3. EXCLUSIVITY: In using the Database, you agree to use such Database
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. COMPANY's
agreement to use such Database exclusively, however, shall be subject to
the following conditions:
(i) COMPANY may temporarily use the services of an alternative audio
content provider to satisfy its distribution needs in the event that
that the audio product at issue is on backorder exceeding five days or
is otherwise "commercially unavailable" as defined in paragraph
2.2.1.2.
(ii) Nothing in paragraph 3 or this Agreement shall prohibit COMPANY
from entering into direct business relationships with labels,
producers, or other entities, whether the business relationship
involves the sale of audio content directly to COMPANY or otherwise.
AEC shall be the primary supplier for video, DVD and Game product.
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: This Agreement will terminate 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 and
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 1
thereto) and subsequent prices shall be generally noticed to the trade
and you by AEC.
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(ii) DATABASE USE: the Database License Fee ("License Fee") shall be based
on your aggregate site fulfillment sales, and shall be equal to:
- (1.0%) of monthly sales; against a monthly guaranteed
minimum amount of $4,000.
(iii)SET-UP FEES: The one-time set-up fee for order processing shall be
waived.
(iv) AEC and COMPANY agree to, in good faith, discuss one stop prices to
the trade and to adjust COMPANY'S prices relative to COMPANY'S sales
volumes.
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, and shall exclude (unless
expressly stated otherwise) sales of Consignment Products (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
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(ii) Web Site Platform (NT/Unix)
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(iii)Web Internet Provider
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(iv) Internal I.P. Address
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(v) Estimated beta test date
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(vi) Estimated Launch date
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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: XXXXXXXXXXXX.XXX AEC ONE STOP GROUP, INC.
Name: Xxxxxx Xxxxxxxx Name:
----------------------------------- -----------------------------------
Individual signing (Please print) Individual signing (Please print)
Signature: Signature:
----------------------------------- -----------------------------------
Title: President & CEO Title
----------------------------------- -----------------------------------
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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) a general interest music guide containing, among
other things, lists of artists, albums, ratings, reviews and other information,
which is published under the trade name "All-Music Guide," and (b) a general
interest movie guide containing, among other things, lists of film stars, motion
pictures, ratings, reviews and other information, 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 Inventory
File"). The AEC Inventory File, the All-Music Guide, and the All-Movie Guide, as
published in electronic form, shall be referred to collectively herein as either
the "DATABASES;"
1.4 AEC is in the business of wholesaling and fulfilling orders for audio
and video products.
2. AEC SERVICES: DATABASE, FULFILLMENT AND CONSIGNMENT.
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 provide appropriate maintenance and
support for the DATABASES to COMPANY personnel.
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 not to sell , disclose, reproduce, or otherwise use the DATABASE in a
manner which is unlawful or which is not consistent with the express terms of
this Agreement and not to contest in any way whatsoever the propriety status of
the DATABASES or AEC's subsisting
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copyrights therein. COMPANY will not remove any proprietary or confidential
legends or markings which AEC has placed upon or within the DATABASES. AEC
agrees that any customer identifying information provided by COMPANY shall
remain the property of COMPANY and shall not be disseminated by AEC to any third
parties without COMPANY's express written authorization.
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 primary responsibility of COMPANY.
(iii) AEC will provide COMPANY with access to
an AEC web site location to query and maintain order status and return
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 SPECIAL HANDLING. AEC, at no charge, will insert
one (1) promotional item 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. 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. AEC reserves the right to reject any insert for any
reason unless insert has been approved by AEC in advance.
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.
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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. CREDIT CARD PROCESSING.
Customer's credit card orders shall be processed in one of the following manners
(check one):
X 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
Consumer Direct Fulfillment (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.
Using COMPANY's merchant account number, AEC
----
shall perform all credit card processing functions at no additional cost to
COMPANY above fees charged by 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 during any two calender month 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 1 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
processingAEC's actual costs of the corrugated shipping box, and shipping costs
required to ship the Products to the Customer.
2.2.4.3 Company shall pay AEC actual packaging costs,
currently at approximately $0.20 (twenty cents) per ORDER, provided that AEC
shall be entitled to raise the amount to match AEC's verifiable increased costs
for packaging materials, if any, if such costs should increase during the term
of this Agreement.
2.3 CONSIGNMENT PRODUCTS/SERVICES.
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2.3.1 SERVICES. AEC shall receive, warehouse and manage COMPANY'S
inventory of all such other products ("Consignment Products") as may be offered
for sale on the On-Line Store from time to time (e.g. t-shirts, hats,
sweatshirts and other merchandise) and shall fulfill all orders thereof on
COMPANY'S behalf and in accordance with the terms of Exhibit III hereto.
2.3.2 OWNERSHIP OF CONSIGNMENT PRODUCT. As between AEC and
COMPANY, all Consignment Product inventory shall remain the property of COMPANY
at all times. AEC agrees that while such Consignment Product is in its
possession it shall safeguard such inventory in the same manner that it
safeguards items in its own inventory
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
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, 1999 were $110 per hour.
3.2 FEEDBACK WITH CUSTOMERS.
3.2.1 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's EDI Status File system provides electronic notification
and invoicing information to COMPANY. Should COMPANY require hard copies of
invoices, AEC shall provide COMPANY the first 50 invoices each month at no cost,
thereafter copies shall be charged to COMPANY at a rate of $.50 each.
3.5.2 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. The Consignment Product Handling Fee (set forth
on Ex. III) shall be separately itemized on each invoice. COMPANY shall pay each
invoice within fifteen (15) days of receipt thereof.
3.5.3 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).
3.5.4 CREDIT LIMIT/LATE PAYMENT. COMPANY is granted an initial
credit amount of $100,000. AEC shall monitor the credit limit amount and may
increase the credit limit as COMPANY's purchases with AEC increase; provided,
however, AEC may make requested adjustments to the stated credit limit if, and
only if, COMPANY's payment history and credit worthiness are satisfactory to
AEC, as determined by 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.
3.5.5 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 - CDF.
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3.5.6 (a) 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.
(b) COMPANY shall have the right to inspect the books
and records of AEC wherever the same may be, insofar as said books and records
pertain to the sales of Products or Consignment Products. Such examination shall
take place during normal business hours, at AEC's place of business, upon
reasonable notice to AEC, at COMPANY'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.
3.6 CONSIGNMENT XXXXXXXX.XXXXXXX agrees to comply with the terms of
Exhibit III hereto with respect to COMPANY's Consignment Products (including,
but without limitation, providing appropriate descriptions of the Consignment
Product, insuring such product, etc.)
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. AEC agrees not
to copy, disclose, or otherwise make available COMPANY's customer identifying
information to any third parties without COMPANY's express written authorization
for any improper or unauthorized purpose.
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; (iii) any reports to be delivered to COMPANY hereunder will
be complete and accurate to the best of AEC's knowledge; (iv) AEC has all the
necessary rights to wholesale its Inventory to COMPANY and to fill orders for
its Inventory on behalf of COMPANY.
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 digitized or electronic images (e.g., album cover
graphics, portraits, etc) ("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 its
affiliate, 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, to the best of COMPANY's knowledge, be accurately
conveyed to AECincluding, as to each order, all information in the form provided
by any Customer; (iv) COMPANY has the all necessary rights to sell Products to
Customers; and (v) COMPANY has all necessary rights to sell the Consignment
Products to Customers and to grant to AEC the right to fill orders for such
products. 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
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, 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 COMPANY in this Agreement; or (ii) any
grossly negligent or tortious act, willful misconduct or willful omission by
COMPANY. 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.
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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 ten percentage points (10%) 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 sixty percent (60%). If in any Surge Month AEC shall fail to meet any of
its Performance Standards by a margin greater than ten percentage points (10 %),
then AEC shall be in Default.
(ii) 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.
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
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Page 10
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.
During the term of the Agreement, COMPANY grants AEC a limited,
nonexclusive 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. Such license shall be
deemed withdrawn at the termination, for any reason, of this Agreement. 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 COMPANY reproduce and display such logos and any copyright notices as
relate to the DATABASES. During the term of the Agreement, parties agree that
the MATRIX and/or 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
CONFIDENTIAL
Page 11
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 contracting 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.
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: ____________________ 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.
11.10. This 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
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Agreed:
Company Name: XXXXXXXXXXXX.XXX AEC ONE STOP GROUP, INC.
Name: Xxxxxx Xxxxxxxx Name:
----------------------------------------- ------------------------------------
Individual signing (Please print) Individual signing (Please print)
Signature: Signature:
----------------------------------------- ------------------------------------
Title: President & CEO Title
----------------------------------------- ------------------------------------
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EXHIBIT I
FULFILLMENT PRICES
AEC ONE STOP GROUP
ONE STOP MAJOR LABEL AND MAJOR INDEPENDENT PRICE LIST
I. AUDIO:
BMG WEA EMD
CD 2% CS 2% CD 2% CS 2% CD 2% CS 2%
17.98 13.09 12.83 10.98 7.50 7.35 17.98 13.09 12.83 10.98 7.50 7.35 17.98 13.09 12.83 10.98 7.50 7.35
16.98 12.09 11.85 9.98 6.75 6.62 16.98 12.09 11.85 9.98 6.75 6.62 16.98 12.09 11.85 9.98 6.75 6.62
15.98 11.35 11.12 7.98 5.35 5.24 15.98 11.35 11.12 7.98 5.35 5.24 15.98 11.35 11.12 7.98 5.35 5.24
13.98 10.59 10.38 6.98 4.69 4.60 13.98 10.59 10.38 6.98 4.25 4.17 13.98 10.59 10.38 6.98 4.69 4.60
11.98 8.85 8.67 5.98 4.25 4.17 11.98 9.09 8.91 11.98 9.09 8.91 5.98 4.25 4.17
CLASSICAL - BMG CLASSICAL - WEA UNIVERSAL
CD 2% CD 2% CD 2% CS 2%
17.98 13.09 12.83 17.98 13.35 13.08 17.98 13.09 12.83 10.98 7.50 7.35
16.98 12.09 11.85 16.98 12.09 11.85 16.98 12.09 11.85 9.98 6.75 6.62
15.98 11.35 11.12 15.98 11.35 11.12 15.98 11.35 11.12 7.98 5.35 5.24
9.98 8.09 7.93 9.98 8.09 7.93 13.98 10.59 10.38 6.98 4.69 4.60
12.98 9.09 8.91 5.98 4.25 4.17
11.98 7.99 7.83
PGD SONY INDEPENDENT PRICING
CD 2% CS 2% CD 2% CS 2% CD 2% CS 2%
17.98 13.09 12.83 10.98 7.50 7.35 17.98 13.09 12.83 10.98 7.50 7.35 17.98 13.09 12.83 13.98 10.49 10.28
16.98 12.09 11.85 9.98 6.75 6.62 16.98 12.09 11.85 9.98 6.75 6.62 16.98 12.09 11.85 12.98 9.99 9.79
15.98 11.35 11.12 7.98 5.35 5.24 15.98 11.35 11.12 7.98 5.35 5.24 15.98 11.35 11.12 11.98 8.99 8.81
13.98 10.59 10.38 6.98 4.69 4.60 13.98 10.59 10.38 6.98 4.69 4.60 14.98 11.09 10.87 9.98 6.99 6.85
11.98 8.85 8.67 5.98 4.25 4.17 11.98 9.09 8.91 5.98 2.99 2.93
CLASSICAL - PGD CLASSICAL - SONY
CD 2% CD 2%
15.98 11.35 11.12 16.98 12.09 11.85
9.98 8.09 7.93 15.98 11.35 11.12
7.98 5.35 5.24 10.98 9.09 8.91
9.98 8.09 7.93
N.B. If products are not on lists above, and not in AEC's regular inventory
holdings, pricing shall be based on cost to AEC and xxxx-up consistent with
creation of above price list, and general market pricing.
II. VIDEO AND DVD
All VHS and DVD product shall be priced at actual manufacturer cost (as
published by the manufacturer) plus a twelve percent (12%) AEC markup.
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III. VOLUME DISCOUNTS
The following discounts shall apply to sales within the indicated
ranges:
ANNUAL SALES DISCOUNT
$1,000,001 - $7,500,000 .25%
$7,500,001 - $15,000,000 .5%
$15,000,001 - $25,000,000 .75%
$25,000,001 and up 1.0%
For example, for annual sales of $8,000,000, the discount shall apply
as follows: the first $1,000,000 in sales shall not be discounted. A discount of
.25% shall apply to the next $6,500,000 in sales. The remaining $500,000 in
sales shall be discounted by .5%.
The discount shall be calculated by AEC within 90 days after each year
during the term hereof. The discount shall be applied as a credit against
COMPANY's purchases in the ensuing year.
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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".
ALL-MOVIE GUIDE:
The following DATABASE information will be marked with the following
All Movie Guide logo and branding: Artist Biographies, Essays, MovieViews, and
Album Reviews will be marked "AMG Biography" and "AMG Review," and "AMG
MovieView," and "AMG Essay." After each biography and album review, the name of
the author, and the term "All-Movie Guide" will be listed. Ratings will be
marked "AMG Ratings", relational elements such as the following will be marked
as: "AMG Movie Recommends."
Set forth on the following pages are examples of the presentations of the All
Music Guide DATABASE elements, and the appropriate copyright notices, which are
pre-approved by AEC.
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EXHIBIT III
CONSIGNMENT INVENTORY OPERATIONAL AND BUSINESS RULES
1) Company agrees to provide AEC with a detailed description the SKU's and an
estimated quantity of each SKU, and the Suggested Retail Price (SRP) for
each SKU prior to AEC moving forward on establishing a consignment service.
2) Common items (items that exist in the AEC One Stop Group product file) will
not be accepted as consignment inventory. a) If a product is in the AEC One
Stop Group database but not stocked, the product will be handled as a
backorder.
3) Consignment product will be warehoused separately. These products will not
be intermingled with other AEC inventory and will not be made available to
other retail entities unless mutually agreed upon in writing by AEC and
Company.
4) All consignment products must have at least ONE identifiable SKU number
(catalog number) on each item (preferably on the spine or other visible
area of the SKU).
5) All consignment products must have a UPC code ON EACH INDIVIDUAL PRODUCT
BEFORE ITS ARRIVAL TO AEC.
a) All products must have ONE UPC code assigned and displayed on each
item of consignment product. If the assignment of a UPC is not
possible by Company, then AEC and Company will determine a means
whereby AEC we provide this as an added service. The standard fee
charged for the application and creation of a UPC is $0.25 per each
piece.
b) All products must be in received in "READY-TO-STOCK" condition.
Meaning, t-shirts must be individually folded (and bagged if Company
requires them to be so), etc. If items are not received in
READY-TO-STOCK condition, AEC will provide this service per individual
item for an additional $0.25 per each piece.
6) AEC will carry no more than 30 pieces of each consignment item unless
otherwise negotiated and no more than 300 unique items (SKU's) may be sent
to AEC, unless otherwise agreed to.
7) AEC will be afforded a one (1%) shrinkage factor.
8) AEC will accept new SKU's (into the database once a month); new SKU's must
be received at AEC by the 5th of each month, unless otherwise agreed.
9) Consignment product information (descriptive information identifying the
product) must be submitted in the attached format. This information must be
submitted at least one week prior to placing a purchase order for these
goods, giving AEC's data entry operators enough time to enter the detailed
product information into the AEC product database.
10) A complete list of items and the number of pieces per item to be delivered
must be provided to AEC at least one week prior to shipment of the goods as
per the purchase order format provided. This allows creation of the PO,
which, in turn, generates the data, required to facilitate proper receipt
of the goods into the AEC warehouse.
11) All packages received at the AEC receiving docks must be clearly marked as
[COMPANY NAME - CONSIGNMENT GOODS].
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12) AEC will charge $5.00 per location (a location is a bin established in the
warehouse to house the SKUS) per month for each SKU not achieving a minimum
turn rate of 12 turns annually. The annual turn rate calculation will begin
90-days after SKU has arrived to AEC and will be measured monthly on a
rolling 90-day period. AEC warehouse space is at a premium, therefore, the
location fee is applied to insure that all items stocked as consignment are
active SKU's.
13) Corrugated shipping containers and related packaging materials (used to
send consignment items to the consumer and to return merchandise to
Company) will be purchased by AEC and charged (at AEC's cost) back to
Company.
14) Retailer will provide necessary insurance coverage for all products
warehoused at AEC and provide copies of such documentation.
15) All items received by AEC must have supporting documentation indicating
that the items were obtained through legal channels and Company has the
legal right to sell the product and to request AEC to warehouse and fill
the orders on their behalf.
16) Consignment handling fees ("Consignment Product Handling Fees") are
calculated as follows: For items sold to the consumer at the following
Suggested Retail Price the following table identifies the handling fees AEC
will charge Company.
SRP AEC HANDLING FEE PER
--- --------------------
ITEM SHIPPED
------------
$0.00 to $19.99 $2.00
$20.00 to $49.99 $2.50
$50.00 to $99.99 $3.00
$100.00 to $XXX.XX $4.00
CONFIDENTIAL
