EXHIBIT 10.21
*** - Indicates material that has been omitted pursuant to a request for
confidential treatment. This material has been filed separately with the
Securities and Exchange Commission. Original length of agreement before
redaction: 9+ pages.
xxxxxxxx.xxx
MERCHANDISING AGREEMENT
PREMIERE PARTNER
This Premiere Partner Merchandising Agreement (the "Agreement") is made as
of March 16, 1999 by and between xxxxxxxx.xxx, Inc., with its principal place of
business at 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, XX 00000 ("theglobe"), and Music HQ,
Inc., with its principal place of business at 000 Xxxxxxxx Xxxxx, Xxxxxx, XX
00000 ("Music HQ").
1. DEFINITIONS.
(a) "Launch Date" means the first day on which theglobe performs any of the
promotions described on Exhibit A.
(b) "Music HQ Banners" means any banner, button, text or similar ads Music
HQ provides to theglobe in connection with this Agreement.
(c) "Music HQ Content" means any content or information (including without
limitation any text, music, sound, photographs, video, graphics, data or
software), in any medium, provided by Music HQ to theglobe (other than Music HQ
Banners).
(d) "Music HQ Marks" means all Music HQ domain names, trademarks and logos
reasonably necessary or desirable for theglobe to perform under this Agreement.
(e) "Music HQ Pages" means the xxxxxxx.xxx and xxxxxxx.xxx websites as co-
branded in accordance with this Agreement.
(f) "Marks" means the Music HQ Marks or theglobe Marks, as applicable.
(g) "Referral" means a person who accesses the Music HQ Pages.
(h) "theglobe Marks" means all theglobe domain names, trademarks and logos
reasonably necessary or desirable for Music HQ to perform under this Agreement.
(i) "theglobe Materials" means theglobe's navigation bars, logos and other
co-branding elements provided to Music HQ for incorporation on the Music HQ
Pages.
(j) "theglobe Site" means all pages under xxxxxxxx.xxx domain.
2. MUSIC HQ PAGES.
2.1 Pre-Launch Deliverables. On or before March 31, 1999, theglobe shall
deliver to Music HQ the following: theglobe Materials, a media and promotional
plan, and a plan for
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doing the production/design services related to integrating Music HQ's
promotions into theglobe Site. In addition, theglobe shall complete such
production/design services.
2.2 Co-Branding. The Music HQ Pages shall be co-branded with theglobe
Materials. The parties shall mutually agree upon the look and feel of any co-
branded Music HQ Pages, specifying the location of all theglobe Materials and
other branding. Music HQ may not publicly display the Music HQ Pages until such
agreement has been reached and theglobe has approved Music HQ's implementation.
Thereafter, without theglobe's written consent, which shall not be unreasonably
withheld, Music HQ shall not change any Music HQ Pages (a) in a way that would
degrade, detract from or interfere with theglobe's branding, or (b) to introduce
any new third party branding on such Music HQ Pages. Unless theglobe requests
otherwise, the Music HQ Pages shall contain substantially the same content and
functionality as the pages under xxx.xxxxxxx.xxx and xxx.xxxxxxx.xxx. Music HQ
shall not provide any hypertext links from the Music HQ Pages to a page outside
of the Music HQ Pages except that Music HQ may provide hypertext links to all of
its entertainment-oriented, wholly owned web sites. If requested by theglobe,
Music HQ shall create additional branded versions of the Music HQ Pages branded
with the branding of theglobe's distribution partners, which branded versions
shall be implemented within 30 days and subject to approval in accordance with
this Section 2.
2.3 Content Delivery. All deliveries of theglobe Materials or Music HQ
Content, as applicable, shall comply with technical standards of the recipient,
as reasonably specified by the recipient.
2.4 Referral Relations. Music HQ shall be responsible for providing all
customer support regarding the Music HQ Pages and the goods and services offered
on such pages, and theglobe may redirect to Music HQ any associated customer
support inquiries. To the extent that Music HQ is delivering back to theglobe
any information about Referrals, Music HQ's privacy policy shall make any
disclosures, or obtain any Referral consent, necessary to make the disclosures
about Referrals back to theglobe required by this Agreement.
2.5 Shopping Cart. If theglobe makes its shopping cart technology
universal so that it can consummate transactions across multiple merchants in
theglobe network, then Music HQ shall work with theglobe to effectuate the
implementation of such technology in connection with purchases from the Music HQ
Pages.
3. MARKETING.
3.1 Promotions. On and following the Launch Date, theglobe shall provide
the promotions described in Exhibit A. In the event that theglobe redesigns
theglobe Site in a way that impacts such promotions, theglobe shall provide
substantially similar promotions on the redesigned site.
3.2 Exclusivity. Subject to the following qualifications and exclusions,
Music HQ shall be the only company whose advertisements' content advertise the
retail sale of Excluded Goods on xxxx.xxxxxxxx.xxx (or a successor area on
theglobe Site which is exclusively devoted to selling goods and services to
theglobe users) and xxx.xxxxxxxx.xxx. "Excluded Goods" are
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entertainment-oriented DVDs, entertainment-oriented, non-interactive music CDs
and cassettes and entertainment-oriented movie videos. "Excluded Goods" do not
include video games.
(a) theglobe may run promotions and advertisements for companies and
websites which sell Excluded Goods (including without limitation providing
hypertext links to their associated sites which may sell Excluded Goods) so long
as the applicable promotion does not mention the retail sale of Excluded Goods
in the promotion. By way of example, theglobe may run a banner ad for Xxxxxx &
Xxxxx which, in the content of the banner, promotes books, even though users who
click through the banner may see promotions for or actually purchase Excluded
Goods. As another example, theglobe may run promotions for SonicNet and E!
which promote their sites generally, even if these sites may promote the retail
sale of Excluded Goods. As another example, theglobe may not run a promotion
for Disney where, in the banner, Disney promotes the sale of one of its videos.
(b) theglobe may perform under its agreements with xxxxxxx.xxx and
xxxxxxxx.xxx. ***.
(c) theglobe may perform under its agreement with grooveJam, including
without limitation selling the grooveJam CDs from xxxx.xxxxxxxx.xxx.
(d) theglobe may fulfill its currently existing banner ad campaign
obligations and obligations with respect to similar promotions (including
without limitation any associated keyword buys). This includes, without
limitation, theglobe's obligations to Video Premiere and Big Star Entertainment.
However, if these agreements come up for renewal and theglobe has the discretion
whether or not to renew, theglobe shall not renew such agreements.
(e) theglobe's relationships with companies that aggregate products or
advertising for third parties are not covered unless such aggregator is
exclusively or primarily in the business of retailing Excluded Goods. For
example, Emaginet is permitted to deliver digital coupons on theglobe Site, and
Emaginet's delivery of digital coupons for music or video to theglobe users is
not covered.
(f) Music or video-related editorial content shall not be deemed an
advertisement, even if theglobe is paid to place it on theglobe Site and even if
the content is accompanied by logos and links.
(g) Areas of theglobe Site not specifically mentioned are not covered,
including without limitation any co-branded sites operated by others, any emails
to members and any third party operated pages framed by theglobe.
(h) Any corporate or asset acquisitions by theglobe are not covered.
(i) All member-created or uploaded content is not covered.
(j) Any promotions for classified ads or auctions are not covered.
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(k) Promotions run in conjunction with contests and sweepstakes are
excluded, including if the prize is an Excluded Good.
(l) Any promotions for any products or services which incidentally
contain an Excluded Good (as part of a package) are not covered. Furthermore,
the promotion or sale of any computer software, video games, or interactive
media are not covered.
3.3 Framing. theglobe in its sole discretion may frame the Music HQ
Pages, and any consideration theglobe derives from such frames shall be solely
theglobe's.
3.4 Music HQ Banners. Music HQ shall deliver to theglobe any Music HQ
Banners which are to be run in accordance with this Agreement. Such banners
shall comply with theglobe's then-current technical standards. The terms of any
insertion order or similar document regarding the Music HQ Banners are expressly
rejected, except to the extent that they specify the location, timing or
duration of the display of the Music HQ Banners and such terms are accepted by
theglobe. Music HQ Banners shall link to the Music HQ Pages. theglobe may
request that Music HQ Banners be co-branded with theglobe Marks, in which case
the parties shall work together to develop a mutually acceptable implementation.
theglobe may approve or reject any Music HQ Banner in its sole discretion.
4. PAYMENT.
4.1 ***.
4.2 ***.
4.3 Placement Fee. On the Launch Date and each monthly anniversary
thereof, Music HQ shall pay to theglobe a nonrefundable (except as described in
Exhibit A) placement fee of *** per month, paid in advance for the following
month.
4.4 Terms. Overdue payments shall accrue interest, at the lesser of 1
1/2% per month or the maximum allowable interest under applicable law, from due
date until paid, and Music HQ shall pay theglobe's costs of collection
(including reasonable attorneys' fees).
4.5 Taxes. Music HQ shall pay, any sales, use or other tax related to the
performance of its obligations under this Agreement.
5. LICENSES AND STANDARDS.
5.1 Content. Music HQ hereby grants to theglobe a non-exclusive,
worldwide license to use, reproduce, create derivative works of (only as
necessary to build pages in a manner consistent with this Agreement), publicly
display, publicly perform and digitally perform Music HQ Banners and Music HQ
Content on theglobe Site or otherwise as reasonably appropriate to advertise and
promote the Music HQ Pages. Subject to the approval process in Section 2,
theglobe hereby grants to Music HQ a non-exclusive, worldwide license to use,
reproduce, create derivative works of (only as necessary to build Music HQ
Pages), publicly display, publicly perform and digitally perform theglobe
Materials on Music HQ Pages.
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5.2 Trademarks. Music HQ hereby grants to theglobe a non-exclusive
license to use the Music HQ Marks to advertise and promote the Music HQ Pages.
theglobe hereby grants to Music HQ a non-exclusive license to use theglobe Marks
on the Music HQ Pages and, if requested by theglobe, in the Music HQ Banners.
5.3 Trademark Restrictions. The Xxxx owner may terminate the foregoing
trademark license if, in its reasonable discretion, the licensee's use of the
Marks tarnishes, blurs or dilutes the quality associated with the Marks or the
associated goodwill and such problem is not cured within 10 days of notice of
breach; alternatively, instead of terminating the license in total, the owner
may specify that certain licensee uses may not contain the Marks. Title to and
ownership of the owner's Marks shall remain with the owner. The licensee shall
use the Marks exactly in the form provided and in conformance with any trademark
usage policies. The licensee shall not take any action inconsistent with the
owner's ownership of the Marks, and any benefits accruing from use of such Marks
shall automatically vest in the owner. The licensee shall not form any
combination marks with the other party's Marks.
5.4 Ownership. As between theglobe and Music HQ: (a) theglobe and its
suppliers retain all rights, title and interest in and to all intellectual
property rights embodied in or associated with theglobe Materials, and (b) Music
HQ and its suppliers retain all rights, title and interest in and to all
intellectual property rights embodied in or associated with the Music HQ Content
and Music HQ Banners. There are no implied licenses under this Agreement, and
any rights not expressly granted to a licensee hereunder are reserved by the
licensor or its suppliers. Neither party shall exceed the scope of the licenses
granted hereunder.
5.5 Standards. Music HQ shall not provide Music HQ Banners (excluding any
theglobe Marks incorporated therein at theglobe's request) or Music HQ Content,
and theglobe shall not provide to Music HQ any theglobe Materials, that: (a)
infringe any third party's intellectual property right or right of publicity or
privacy; (b) violate any law or regulation; (c) are defamatory, obscene, harmful
to minors or child pornographic; (d) contain any viruses, trojan horses, worms,
time bombs, cancelbots or other computer programming routines that are intended
to damage, detrimentally interfere with, surreptitiously intercept or
expropriate any system, data or personal information; or (e) are materially
false, inaccurate or misleading.
5.6 Quality Standards. Music HQ shall provide the goods and services
offered from the Music HQ Pages, and any related customer and technical support,
on a quality level substantially equivalent to the quality offered by Music HQ's
online competitors. The category or types of goods and services offered from
the Music HQ Pages as of the Effective Date shall be the same or substantially
similar throughout the term of the Agreement. Music HQ shall clearly state, and
shall follow the stated, warranty and refund policies. All Referrals shall be
treated at least as favorably in all respects (including without limitation with
respect to pricing, quality of service, and customer support responsiveness) as
Music HQ treats users of the xxxxxxx.xxx and xxxxxxx.xxx sites.
6. INFORMATION ABOUT REFERRALS. Music HQ shall not disclose to any third
parties any information or data collected from or about Referrals (including
information provided by theglobe, voluntarily-disclosed information, and any
information Music HQ gleans from Referrals'
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access or use of the Music HQ Pages), nor may Music HQ use such information for
any purpose other than as necessary to deliver purchased goods or services to
Referrals (or, for those Referrals who sign up as affiliates, to perform in
accordance with Music HQ's affiliate program). Music HQ shall use at least
industry-standard methods to protect the security of such Referral-related
information.
7. NO WARRANTIES. EACH PARTY PROVIDES ALL MATERIALS AND SERVICES TO THE OTHER
PARTY "AS IS." EACH PARTY DISCLAIMS ALL WARRANTIES AND CONDITIONS, EXPRESS,
IMPLIED OR STATUTORY, INCLUDING WITHOUT LIMITATION THE IMPLIED WARRANTIES OF
TITLE, NON-INFRINGEMENT, MERCHANTABILITY, AND FITNESS FOR A PARTICULAR PURPOSE.
Each party acknowledges that it has not entered into this Agreement in reliance
upon any warranty or representation except those specifically set forth herein.
Unless an approval process is specified herein, all deliverables provided by one
party to the other shall be deemed accepted (for purposes of the UCC) when
delivered.
8. TERM AND TERMINATION.
8.1 Term. This Agreement will become effective on the Effective Date and
will continue in effect for 1 year following the Launch Date. The parties
shall, during the 60 days immediately prior to expiration, negotiate in good
faith to extend the term of this Agreement. However, no extension shall apply
unless mutually agreed upon in writing by both parties.
8.2 Termination for Failure to Perform. By providing written notice, a
party may terminate this Agreement if the other party materially breaches this
Agreement and fails to cure that breach within 15 days after receiving written
notice of the breach. In addition, by providing written notice, theglobe may
terminate this Agreement, or at its option immediately suspend its promotion and
other efforts hereunder, in the case of Music HQ's breach of Section 11.1.
8.3 Effects of Termination. Upon expiration or termination, all licenses
granted hereunder shall terminate unless such licenses are expressly stated as
surviving. Music HQ shall promptly remove all theglobe Marks and theglobe
Materials from its servers, and theglobe shall promptly remove all Music HQ
Marks, Music HQ Banners and Music HQ Content from its servers. Sections 1, 4.5,
5.4, 6, 7, 8.3, 9, 10 and 11.2 to 11.9, and any obligation to pay any accrued
but unpaid amounts, shall survive any expiration or termination.
9. LIABILITY LIMITS. NEITHER PARTY SHALL BE LIABLE FOR LOST PROFITS OR
SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES (HOWEVER ARISING, INCLUDING
NEGLIGENCE) ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT, EVEN IF THE
PARTIES ARE AWARE OF THE POSSIBILITY OF SUCH DAMAGES.
EXCEPT IN THE EVENT OF A CLAIM UNDER SECTION 10, IN NO EVENT SHALL EITHER PARTY
BE LIABLE TO THE OTHER PARTY IN AN AMOUNT GREATER THAN TWO TIMES THE AMOUNT
MUSIC HQ ACTUALLY PAYS TO THEGLOBE HEREUNDER.
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10. INDEMNITY. Each party (the "Indemnifying Party") shall indemnify the other
party (the "Indemnified Party") against any and all claims, losses, costs and
expenses, including reasonable attorneys' fees, which the Indemnified Party may
incur as a result of claims in any form by third parties arising from: (x) the
Indemnifying Party's acts, omissions or misrepresentations to the extent that
the Indemnifying Party is deemed an agent of the Indemnified Party, or (y) the
Indemnifying Party's breach of its privacy policy. In addition, theglobe shall
indemnify Music HQ against any and all claims, losses, costs and expenses,
including reasonable attorneys' fees, which Music HQ may incur as a result of
claims in any form by third parties arising from theglobe Materials or theglobe
Marks. In addition, Music HQ shall indemnify theglobe against any and all
claims, losses, costs and expenses, including reasonable attorneys' fees, which
theglobe may incur as a result of claims in any form by third parties arising
from Music HQ Banners (excluding theglobe Marks if applicable), Music HQ
Content, Music HQ Marks, any goods or services offered or sold from the Music HQ
Pages, Music HQ's affiliate program or Music HQ's breach of Section 11.1. The
foregoing obligations are conditioned on the Indemnified Party: (i) giving the
Indemnifying Party written notice of the relevant claim, (ii) cooperating with
the Indemnifying Party, at the Indemnifying Party's expense, in the defense of
such claim, and (iii) giving the Indemnifying Party the right to control the
defense and settlement of any such claim, except that the Indemnifying Party
shall not enter into any settlement that affects the Indemnified Party's rights
or interest without the Indemnified Party's prior written approval. The
Indemnified Party shall have the right to participate in the defense at its
expense.
11. GENERAL.
11.1 Compliance with Laws. At its own expense, Music HQ shall comply with
all applicable laws and regulations regarding its performance in connection with
this Agreement, including without limitation those applicable to the marketing
or sale of the goods or services offered from the Music HQ Pages.
11.2 Governing Law. This Agreement will be governed and construed in
accordance with the laws of the State of New York without giving effect to
conflict of laws principles. Both parties submit to personal jurisdiction in
New York and further agree that any cause of action arising under this Agreement
shall be brought in a court in New York City, NY.
11.3 Publicity. Neither party shall issue any press release or similar
publicity statement regarding this Agreement without the prior approval of both
parties (not to be unreasonably withheld) or as required by law. The parties
shall issue the first press release jointly.
11.4 Independent Contractors. The parties are independent contractors,
and no agency, partnership, franchise, joint venture or employment relationship
is intended or created by this Agreement. Neither party shall make any
warranties or representations on behalf of the other party.
11.5 Assignment. Neither party may assign its rights or delegate its
duties hereunder (except to an affiliated company, or to a successor in interest
in the event of a merger, sale of assets of the business to which this Agreement
is related, or consolidation) without the other party's prior
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written consent, which shall not be unreasonably withheld, and any purported
attempt to do so is null and void.
11.6 Severability; Headings. If any provision herein is held to be
invalid or unenforceable for any reason, the remaining provisions will continue
in full force without being impaired or invalidated in any way. The parties
agree to replace any invalid provision with a valid provision that most closely
approximates the intent and economic effect of the invalid provision. Headings
are for reference purposes only and in no way define, limit, construe or
describe the scope or extent of such section.
11.7 Force Majeure. Except as otherwise provided, if performance
hereunder (other than payment) is interfered with by any condition beyond a
party's reasonable control, the affected party, upon giving prompt notice to the
other party, shall be excused from such performance to the extent of such
condition. Each party acknowledges that website operations may be affected by
numerous factors outside of a party's control.
11.8 Notice. Any notice under this Agreement will be in writing and
delivered by personal delivery, overnight courier, confirmed facsimile,
confirmed email, or certified or registered mail, return receipt requested, and
will be deemed given upon personal delivery, 1 day after deposit with an
overnight courier, 5 days after deposit in the mail, or upon confirmation of
receipt of facsimile or email. Notices will be sent to a party at its address
set forth above or such other address as that party may specify in writing
pursuant to this Section.
11.9 Entire Agreement; Waiver. This Agreement sets forth the entire
understanding and agreement of the parties, and supersedes any and all oral or
written agreements or understandings between the parties, as to the subject
matter of the Agreement. This Agreement may be changed only by a writing signed
by both parties. The waiver of a breach of any provision of this Agreement will
not operate or be interpreted as a waiver of any other or subsequent breach.
XXXXXXXX.XXX, INC.: MUSIC HQ:
By: /s/ Xxxxx X. Xxxxxx By: /s/ Xxxx Xxxxxxxx
Name: Xxxxx X. Xxxxxx Name: Xxxx Xxxxxxxx
Title: Director, Business Development Title: President
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Exhibit A
Promotions
1. ***.
2. A Music HQ button shall be periodically rotated on the xxxx.xxxxxxxx.xxx
home page.
3. theglobe shall place a search box for xxxxxxx.xxx on the music subtheme
page on xxx.xxxxxxxx.xxx, and theglobe shall place a search box for xxxxxxx.xxx
on the movie subtheme page on xxx.xxxxxxxx.xxx.
4. theglobe shall include a link to the Music HQ Site from the right hand
column nav bar (under "Resources") in the Entertainment, Music, Movies and
Television theme areas on xxx.xxxxxxxx.xxx.
5. Music HQ shall be the sponsor of *** sweepstakes associated with member
registration and *** entertainment-related contests. Music HQ shall provide to
theglobe a prize for distribution by theglobe to winners of such contests and
sweepstakes. Each such prize shall have a value no less than *** and no more
than ***. Music HQ shall deliver the prize to theglobe no later than 2 weeks
prior to the commencement of the applicable contest/sweepstakes; and if it does
not do so, theglobe may procure a suitable prize itself and invoice Music HQ for
the applicable amount. The rules and operation of such contests and sweepstakes
shall be determined solely by theglobe. ***.
6. theglobe shall include promotions for the Music HQ Site in its emails to
members *** times during the year.
. theglobe shall run *** Music HQ Banners on theglobe Site each month
(commencing August 1999), broken down as follows: *** banners, *** buttons and
*** text links. At least *** banners of the *** Music HQ Banners shall be
displayed in the Entertainment theme area on xxx.xxxxxxxx.xxx. In the event
that theglobe fails to deliver the foregoing impressions in a particular month,
Music HQ's sole and exclusive remedy shall be to have theglobe continue the
promotions in subsequent months until the minimum number of promotions are
complete. If, at the end of the Agreement, theglobe fails to deliver all
impressions promised hereunder, theglobe shall have an additional 90 days to
deliver the total number of required impressions. If theglobe does not do so,
theglobe shall thereafter promptly refund a prorated amount of the placement
fees set forth in Section 4.3 (prorated based on the number of impressions
actually delivered).
7. ***.
8. Music HQ shall be promoted in *** Holiday/Special Section areas on a page in
such area selected by theglobe as being relevant to Music HQ, and Music HQ will
be included in the associated email to members.
9. Music HQ shall be promoted as the sponsor of *** entertainment-related
member chats.
10. ***.
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