EXHIBIT 10.10 CONFIDENTIAL TREATMENT REQUESTED
--------------------------------
Certain information has been omitted from this exhibit
and filed separately with the SEC pursuant to a request
for confidential treatment under Rule 406
FULFILLMENT AGREEMENT
This Fulfillment Agreement, including all exhibits and attachments hereto (the
"Agreement") is entered into this 1st day of December, 1998 (the "Effective
Date"), by and between NAVARRE CORPORATION, a Minnesota corporation ("Navarre")
with its principal place of business at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and NETRADIO CORPORATION, a Minnesota corporation ("NetRadio")
with its principal place of business at Riverplace Exposition Hall, ▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
RECITALS
WHEREAS, Navarre is in the business of sales and distribution of audio/video
computer software, compact disks, cassettes and DVDs, and provides, packs and
ships such products to the NetRadio Retail Website customers; and
WHEREAS, NetRadio operates several "Online Retail Websites" on the "World Wide
Web" through which it intends to sell "Products" (as hereinafter defined) to
consumers including, but not limited to, audio/video computer software, compact
disks, cassettes, vinyl, and DVDs, via a Website channel; and
WHEREAS, NetRadio desires to engage Navarre for the purpose of fulfilling
NetRadio purchase orders for Products on the terms and conditions set forth
herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. DEFINITIONS.
(a) "Product(s)" shall mean audio and/or video products and computer
software items including, but not limited to, compact disks,
cassettes, vinyl, singles, computer software programs, and DVD
available for sale as offered over the NetRadio Websites or as
available from time to time on the NetRadio Websites and any partner
Websites via "Nested Commerce."
(b) "Nested Commerce" shall mean the business conducted by creating
NetRadio Retail Website "Virtual Storefronts" on other, non-owned
Websites. The purpose is to distribute the NetRadio Retail Websites to
as many locations as possible in exchange
EXHIBIT 10.10 CONFIDENTIAL TREATMENT REQUESTED
--------------------------------
Certain information has been omitted from this exhibit
and filed separately with the SEC pursuant to a request
for confidential treatment under Rule 406
for a commission on Products sold off of the Nested Commerce Websites.
The goal for Nested Commerce is to maximize sales for NetRadio Retail
Websites.
(c) "Navarre Payments" shall mean all payments due Navarre from NetRadio
based on the pricing list and payment schedule set forth on the
attached Exhibit A, which pricing list may be updated by Navarre from
time to time, and such updates shall be a part of this Agreement
within [60] days after Navarre's delivery to NetRadio of an updated
Exhibit A.
(d) "Term" shall mean the term of this Agreement [which shall be for
approximately five (5) years] beginning on the date of this Agreement
and ending on December 1, 2003. Thereafter, the Agreement shall
automatically renew for successive [one (1)] year periods unless
sooner terminated by one or the other of the parties in accordance
with the procedures set forth in Section 10 of this Agreement.
(e) "User(s)" shall mean those individuals or entities who sign on to a
NetRadio Website and who are potential customers.
(f) "SCICOM" shall mean the company that provides Management Information
Systems ("MIS") for Navarre including inventory updates, order status,
and database updates.
2. GRANT.
(a) BASIC AGREEMENT. NetRadio and Navarre agree to develop a computer
interface for the purposes of conducting small order music product
transactions via on-line retail stores. NetRadio has built and will
maintain Online Retail Websites. NetRadio will also conduct all
marketing and merchandising efforts, collect orders and send such
orders to Navarre via Electronic Data Interchange ("EDI"). Navarre
will be responsible for picking, packing and shipping orders directly
to NetRadio's customers. Navarre hereby accepts such grant and agrees
to fulfill such orders as set forth herein.
(b) INTERNET FULFILLMENT. During the term of this Agreement, Navarre
agrees that it will not provide Internet fulfillment of Products for
any other exclusive Internet company; provided, however, that Navarre
reserves the right to provide Internet fulfillment for any current or
prospective retail customer of Navarre that also buys audio CD product
from Navarre for its retail sales establishments. If Navarre does
provide such Internet fulfillment, it will be at a pricing schedule
equal to or higher than the prices then charged to NetRadio.
-2-
EXHIBIT 10.10 CONFIDENTIAL TREATMENT REQUESTED
--------------------------------
Certain information has been omitted from this exhibit
and filed separately with the SEC pursuant to a request
for confidential treatment under Rule 406
(c) COMPLIANCE. NetRadio and Navarre agree to implement such practices and
procedures as are necessary to assure the compliance of either party,
or any division thereof, with the terms and conditions of this
Agreement.
(d) SET UP. Navarre will provide database and technical assistance to
NetRadio for the testing of NetRadio's EDI transmission of orders to
Navarre's inventory and IT system.
(e) ADVERTISING REVENUE. NetRadio will procure co-op advertising revenue
from media software manufacturers. Navarre will administer co-op funds
for all NetRadio Retail Website co-op advertising programs from labels
distributed by Navarre. In exchange for co-op administration services,
Navarre will receive a 15% commission for such services performed on
labels distributed by Navarre.
(f) "FIRST-CHOICE SUPPLIER". Navarre will be a "First-Choice" supplier of
Products and related order fulfillment services for NetRadio Retail
Websites; provided, however, that NetRadio may utilize third party
fulfillment sources for any Products not available through Navarre.
The mutual goal for NetRadio and Navarre will be to provide a
competitive range of products, at a competitive retail price, for all
NetRadio Retail Websites and be competitive with industry benchmarks
for fulfillment, delivery, and service. First-Choice is defined as
follows:
NetRadio's e-commerce engine will search the Navarre database
system for immediate availability of Product inventory before any
other fulfillment source is used. If Navarre's database indicates
that inventory is available, Navarre shall notify NetRadio in
writing within 24 hours if for any reason such inventory is not
immediately available for shipment. If Navarre has current
inventory, and the lowest cost per item, for the selected
product, Navarre will receive the purchase order via EDI from
NetRadio. If Navarre does not carry current inventory for the
selected product, NetRadio will then search secondary fulfillment
sources for inventory availability. In the case of a multiple
unit order, Navarre must be able to fulfill all items on a
multiple-unit order, at the lowest cost per item, to avoid a
duplication of shipping costs to NetRadio (by using multiple
fulfillment sources to fulfill one transaction). If Navarre
cannot fulfill all items for a multiple unit order, NetRadio's
e-commerce engine will search for a secondary fulfillment source
that can fill all items on the purchase order.
-3-
EXHIBIT 10.10 CONFIDENTIAL TREATMENT REQUESTED
--------------------------------
Certain information has been omitted from this exhibit
and filed separately with the SEC pursuant to a request
for confidential treatment under Rule 406
3. ORDER PROCEDURE.
(a) FULFILLMENT. The following sets forth NetRadio's service requirements
from Navarre's fulfillment and warehouse operational systems:
(i) STANDARD. Standard orders are defined as orders shipped
domestically and internationally via carriers other than
overnight carriers (FedEx, UPS Overnight, Airborne Express,
etc.). On any business day that Navarre receives standard orders
by 1:00 p.m. Central Standard Time ("CST"), it will ship the
orders the same business day. Standard orders received after 1:00
p.m. CST will be deemed received the next business day and
Navarre will ship these orders the next business day. Orders from
NetRadio retail Websites will be transmitted via EDI every hour.
The fulfillment goal for standard shipments for United States
orders shall be shipment to the customer within three (3)
business days from receipt of the order at NetRadio. The
fulfillment goal for international order delivery is to have
Products arrive within seven (7) to ten (10) business day from
the receipt of the order.
(ii) PRIORITY. Priority orders are defined as orders shipped
domestically via Federal Express, UPS overnight or 2 Day or
Airborne Express. Priority orders received on any business day by
11:00 a.m. CST will be shipped on the same day. Orders received
after 11:00 a.m. CST will be shipped the following business day.
(iii) PEAK PERIODS. The first day of a business week and any day on
which order volume is greater than 20% above average (calculated
on a floating 30-day basis) is defined as a "Peak Period."
Navarre shall use best efforts to (a) notify NetRadio in advance
of any seasonal or other anticipated Peak Periods and (b) adhere
to the fulfillment policies set forth above during Peak Periods,
but its failure to so adhere during Peak Periods shall not be
considered a default under this Agreement.
(iv) PRE-ORDERS. NetRadio shall collect pre-orders until five (5)
business days prior to the date that a new release title is first
to be made available to consumers (the "street date"), at which
point such pre-orders will be forwarded in a separate batch-EDI
to Navarre on the date and time of day required by Navarre.
Navarre shall ship all pre-
-4-
EXHIBIT 10.10 CONFIDENTIAL TREATMENT REQUESTED
--------------------------------
Certain information has been omitted from this exhibit
and filed separately with the SEC pursuant to a request
for confidential treatment under Rule 406
orders no later than street date minus one day, provided Navarre
has received the new release title(s) from the label/distributor
of such new release(s) in time for processing. If a street date
is delayed, NetRadio will be responsible for holding the
pre-orders until five (5) days before the new street date.
(v) BACK-ORDERS. NetRadio may elect to have Navarre hold an order
that has one or more items out of stock (only if secondary
fulfillment sources are also out of stock) until it is completely
fulfilled by typing a "Y" in the "ship complete" field of the EDI
inbound specifications. NetRadio may inform Navarre from time to
time of the number of days, up to a maximum of 30 days (the
"Back-Order Period"), that Navarre is to hold such "ship
complete" orders before shipping the available Products and
canceling the out of stock Products. In the event that all
Products included in an order are out of stock, and secondary
fulfillment sources cannot ship an order, Navarre will hold the
order for a 30 day period before canceling the order (subject to
prior cancellation of such order by NetRadio).
(vi) INVENTORY. Navarre will provide NetRadio with inventory updates
on an hourly basis via File Transfer Protocol ("FTP"). This FTP
update should occur during Navarre business hours, second shifts,
and any time that SCICOM updates the Navarre inventory database.
Since the NetRadio Retail Websites are open 24 hours a day and
seven days a week, this information is vital for timely, accurate
information for NetRadio customers. NetRadio will e-mail
customers with information on inventory availability. NetRadio
customers will have the option of canceling an order that cannot
be fulfilled, or choosing to elect an option of waiting no longer
than 30 days for the back-ordered Product to be fulfilled. In
addition, if Navarre's record keeping is inaccurate and/or
Navarre cannot ship requested inventory within 24 hours, NetRadio
shall be entitled to use alternative fulfillment sources.
(vii) LABELS; PACKING SLIPS. At the request and with the approval of
NetRadio, Navarre will create customer mailing labels AND packing
slips with NetRadio Retail Website logos for all orders shipped
from Navarre.
-5-
EXHIBIT 10.10 CONFIDENTIAL TREATMENT REQUESTED
--------------------------------
Certain information has been omitted from this exhibit
and filed separately with the SEC pursuant to a request
for confidential treatment under Rule 406
(viii) PACKAGING. Navarre will strive for the highest quality of
package presentation for all items fulfilled by Navarre. This
includes, but is not limited to (1) cardboard box packaging for
all configurations for media software, (2) even alignment of the
mailing label on the top of the carton, (3) even alignment of
sealing tape on the shipping carton, (4) the packing list shall
be neatly folded and placed INSIDE of the carton, (5) packaging
shall be consistent with other, leading Online Retail Websites.
This will help maintain the consumer perception that NetRadio
Retail Websites are of the highest quality and consistent with
industry benchmarks.
(ix) NAVARRE PAYMENTS. At the end of each month, NetRadio shall
transfer the Navarre Payments for Product orders for the month to
the Navarre account designated for this purpose by Navarre.
Calculations of the Navarre Payment due each month shall be based
on the total Navarre Product orders completed at the prices
calculated in accordance with the pricing sheet attached to this
Agreement as Exhibit A.
(x) MONTHLY REPORTS. NetRadio and Navarre shall compare and deliver
to the other party summary reports of Product transactions each
month within 15 days of the end of each calendar month. These
reports will verify and confirm that unit sales and costs are
accurate and the respective sales reporting systems are in synch.
4. PRODUCT RETURNS.
(a) RETURN POLICY. Navarre will re-fulfill orders to NetRadio's customers
at no additional fulfillment or return processing costs to NetRadio
for returnable Product, under the following circumstances:
(i) Items reported as missing by the consumer that were listed on the
invoice as fulfilled;
(ii) Items returned as incorrect items shipped (items included in the
package that were not listed on the invoice); and
(iii) Items returned as defective product. Return processing
information will be posted weekly to Navarre's Bulletin Board
System.
-6-
EXHIBIT 10.10 CONFIDENTIAL TREATMENT REQUESTED
--------------------------------
Certain information has been omitted from this exhibit
and filed separately with the SEC pursuant to a request
for confidential treatment under Rule 406
(b) RETURNS. Navarre will accept NetRadio Retail Website returns into the
Navarre warehouse facility. Shipping instructions and return policies
will be included on the back of each packing list.
(c) RESTOCKING FEE. All accepted returns, other than those set forth in
Section 4(a) above, will include a [Confidential Treatment Requested]
percent [Confidential Treatment Requested] restocking fee payable to
Navarre for processing such returns. NetRadio will also pay a
[Confidential Treatment Requested] refurbishing fee on all accepted
open returns.
(d) MODIFICATIONS. Navarre and NetRadio reserve the right to modify
respective return policies through mutual agreement from time to time
by way of written notice.
(e) RESTRICTED RETURNS. Navarre will not accept for return accessories,
blank tape and vinyl product (including, without limitation, LPs and
12" singles), shopworn product (items that have damage to the artwork,
have foreign substance on the media or have been defaced), imports,
limited editions, Product identified in the Navarre database as
non-returnable, Product sold by a record club, promotional product
(free product give-a-ways), counterfeit product, product without the
original artwork or liner notes, or Product with a last customer
return date (as defined in the Navarre database documentation) prior
to the date the returned Product is received by Navarre from NetRadio.
In addition, Navarre does not accept return of opened CDs from the
following: (1) Sony Music Entertainment ("Sony"); (2) Universal
("UNI"); (3) Warner, Electra & Atlantic ("WEA"); or (4) Polygram
Distribution ("PGD") CDs, or PGD cassettes, or any opened PGD
cassettes that do not have their original wrapper intact. For purposes
hereof, "opened" means product returned with the top spine label or
original manufacturer's "dog-bone" holographic sticker removed or cut
in any way.
(f) CREDIT CARD CHARGE BACKS. NetRadio will be responsible for any
required credit card charge back and may set off any Navarre portion
of the return against Navarre Payments due in the following month.
Products not returned within this 30-day period shall be deemed
accepted by NetRadio and its users as non-defective. Other than return
of defective Products, NetRadio shall have no right of return or
refund without the express written approval of Navarre.
-7-
EXHIBIT 10.10 CONFIDENTIAL TREATMENT REQUESTED
--------------------------------
Certain information has been omitted from this exhibit
and filed separately with the SEC pursuant to a request
for confidential treatment under Rule 406
5. SHIPPING.
(a) RISK OF LOSS. All shipments under this Agreement shall be F.O.B.
Navarre's shipping facility. Title and risk of loss with respect to
all orders and Products shipped by Navarre under this Agreement shall
pass to NetRadio or its customers upon delivery of the Products to the
carrier at the point of shipment. In the event of shipping damage or
orders lost in shipment, Navarre will assist in filing a claim on
behalf of NetRadio and will credit NetRadio any amounts received or
credit to Navarre in connection with each claim.
(b) CHOICE OF CARRIER. Navarre shall ship the order with the carrier
requested by NetRadio or its customer. Navarre shall cancel any order
for which the delivery address is not serviced by the indicated
carrier, and NetRadio shall have the option to retransmit the order to
be shipped via a secondary fulfillment source or alternate carrier.
(c) SHIPPING COSTS. Navarre shall invoice NetRadio's customers at such
rates as are requested by NetRadio. NetRadio shall pay Navarre
shipping costs per the shipping tables attached hereto as Exhibit B
(as amended from time to time by Navarre). Navarre shall provide
NetRadio written notice of shipping rate changes and the effective
date of such changes. Navarre represents that the shipping costs
charged to NetRadio are its actual shipping costs (not considering
rebates).
(d) PAPER INSERTS. NetRadio shall pay a fee of [Confidential Treatment
Requested] per paper insert packed by Navarre at the request of
NetRadio in Product shipped under this Agreement. NetRadio shall
supply the required paper inserts at no cost to Navarre. All paper
inserts must be lightweight, paper-based, promotional items the same
size or smaller than a standard single CD, or pre-folded to such size.
(e) MERCHANDISE INSERTS. At NetRadio's request, Navarre shall insert
promotional merchandise inserts in its orders at a cost to be
negotiated by the parties. NetRadio shall supply those inserts at no
cost to Navarre.
(f) INSERT BAR-CODES. A unique UPC bar-code is required for each
merchandise insert. NetRadio shall purchase and apply a proprietary
bar-code on all merchandise inserts. At NetRadio's request or if the
bar-code does not meet Navarre's standards, Navarre shall create and
apply a bar-code for a fee of [Confidential Treatment Requested] per
applied bar-code.
-8-
EXHIBIT 10.10 CONFIDENTIAL TREATMENT REQUESTED
--------------------------------
Certain information has been omitted from this exhibit
and filed separately with the SEC pursuant to a request
for confidential treatment under Rule 406
(g) EXCLUSIVE MERCHANDISE. Navarre shall receive, warehouse and ship
exclusive merchandise sold through NetRadio for a fee to be negotiated
after a sample has been received and reviewed for packing and shipping
requirements. For merchandise that is standard Product (single CDs or
cassettes and single VHS) a fee of [Confidential Treatment Requested]
per unit will be applied.
6. PAYMENTS.
(a) PRICING SHEETS. The Navarre Payments due Navarre from NetRadio for the
sales of Products shall be determined as set forth on the pricing
sheets attached to this Agreement as Exhibit A.
(b) NAVARRE PAYMENTS. All Navarre Payments shall be made in United States
dollars, and shall be made without deduction or withholding. All risk
of currency exchange shall be borne by NetRadio. Navarre's fees do not
include any foreign, national, state or local sales, use, value-added,
withholding or other taxes, custom duties or similar tariffs and fees
which Navarre may be required to pay or collect upon delivery of the
Products. Should any tax or levy be made, NetRadio agrees to be fully
responsible for, and promptly pay such tax or levy and indemnify
Navarre for any claim for such tax or levy demanded. NetRadio is not
liable for any income taxes due by Navarre. NetRadio agrees to provide
Navarre with appropriate resale certificate numbers and other
documentation satisfactory to the applicable taxing authorities to
substantiate any claim of exemption from any such taxes or fees.
7. FURTHER OBLIGATIONS.
(a) "FIRST-CHOICE" PROVIDER. NetRadio agrees that Navarre is, for the Term
of this Agreement, NetRadio's First-Choice provider for fulfillment of
Products sold over the NetRadio Websites.
(b) EMPLOYEES. Navarre and NetRadio shall each assign specific individuals
to assist the other in the fulfillment of this Agreement for order
placement and confirmation.
(c) DISCLOSURE. Navarre and NetRadio may make public statements about the
existence of general terms of this Agreement.
(d) INFORMATION DATABASE. NetRadio maintains the rights and ownership of
the customer "Transaction Information Database" of sales off of
NetRadio Retail Websites. Both parties shall use best efforts to
ensure maximum security of transaction information maintained on each
party's computer system including, but not limited to, the names,
-9-
EXHIBIT 10.10 CONFIDENTIAL TREATMENT REQUESTED
--------------------------------
Certain information has been omitted from this exhibit
and filed separately with the SEC pursuant to a request
for confidential treatment under Rule 406
addresses and Products ordered by NetRadio's customers. NetRadio and
Navarre shall not sell, license, or transfer the customer information
database to a third party as this would be a violation of the NetRadio
customer "Privacy Pledge."
(e) FILL RATES. Navarre shall strive to maintain 24-hour turnaround fill
rates greater than 90% for all items listed in the Navarre inventory
database as "in stock." If Navarre-distributed transaction fill rates
fall below the 90% level, NetRadio reserves the right to direct orders
to secondary fulfillment sources until Navarre can achieve fill rates
above the 90% level. In addition, if Navarre cannot ship any
particular product or products within 24 hours, NetRadio shall be
entitled to use secondary fulfillment sources.
8. CONFIDENTIALITY.
(a) CONFIDENTIAL INFORMATION. During the Term of this Agreement, and for a
period of two (2) years from the termination or expiration of this
Agreement, NetRadio and Navarre mutually agree to keep in confidence
and prevent the acquisition, disclosure, use or misappropriation by
any person or persons of information relating to this Agreement,
including but not limited to all types of information regarding
customer and supplier lists, pricing information, new product
development, technical information, data, formulas, patterns,
compilations, programs, devices, methods, techniques, marketing plans,
business procedures, agreements with any supplements, techniques or
know-how, processes or other proprietary or confidential or
intellectual proprietary information (hereafter "Confidential
Incorporation") which is received from either party under this
Agreement; provided, however, that neither party shall be liable to
the other party for disclosure of any data if the same is disclosed
with the prior written approval of the other party. Both parties agree
that if it breaches this non-disclosure agreement, the owner of the
Confidential Information shall suffer irreparable injury and be
entitled immediately to a temporary and permanent injunction.
(b) EXEMPT CONFIDENTIAL INFORMATION. The foregoing confidentiality
obligation shall not apply to information which the recipient can
demonstrate by written evidence:
(i) is or becomes publicly available without breach of this Agreement
by the party receiving the Confidential Information;
(ii) is released for disclosure by the disclosing party with its
written consent;
-10-
EXHIBIT 10.10 CONFIDENTIAL TREATMENT REQUESTED
--------------------------------
Certain information has been omitted from this exhibit
and filed separately with the SEC pursuant to a request
for confidential treatment under Rule 406
(iii) is known by the receiving party prior to the disclosure;
(iv) is rightly received by the receiving party from a third party
without confidential limitations; or
(v) is hereafter disclosed by the owner of the Confidential
Information to a third party without restriction on disclosure.
(c) CONFIDENTIAL INFORMATION REPRESENTATIONS. NetRadio and Navarre each
hereby agree:
(i) that all Confidential Information remains the property of the
disclosing party and will upon written request by the disclosing
party, promptly return all Confidential Information to the
disclosing party;
(ii) that the parties hereto shall disclose Confidential Information
in writing when practical, and when Confidential Information is
disclosed orally, shall promptly confirm such Confidential
Information in writing;
(iii) that the parties hereto shall not disclose Confidential
Information given to it by the other party to any person, real or
legal, except as necessary for the other party to perform its
obligations under this Agreement;
(iv) that the parties hereto shall require employees and third parties
having necessary access to Confidential Information obligations
of confidence and non-use consistent with this non-disclosure
agreement;
(v) that the parties hereto shall exercise the same degree of care to
safeguard the confidentiality of such Confidential Information as
it would exercise in protecting the confidentiality of similar
property of its own (but in no event less than is standard in the
industry); and
(vi) that the parties hereto use their best efforts to prevent
inadvertent or unauthorized disclosure, publication or
dissemination of any Confidential Information.
(d) UNAUTHORIZED USE OF CONFIDENTIAL INFORMATION. Each party shall notify
the other of any actual or suspected unauthorized use or disclosure of
Confidential Information
-11-
EXHIBIT 10.10 CONFIDENTIAL TREATMENT REQUESTED
--------------------------------
Certain information has been omitted from this exhibit
and filed separately with the SEC pursuant to a request
for confidential treatment under Rule 406
of infringement of any proprietary rights of which such party has
knowledge and will reasonably cooperate with the other party in the
investigation and prosecution of such unauthorized use, disclosure or
infringement.
(e) CONFIDENTIAL INFORMATION SURVIVAL. This confidentiality and
non-disclosure agreement shall survive the termination or expiration
of the entire Agreement.
9. REPRESENTATIONS, WARRANTIES AND INDEMNIFICATIONS
(a) NETRADIO RIGHTS. NetRadio represents and warrants to Navarre that it
has (i) used best-practices to obtain the sufficient rights to all the
code, documentation, trademarks, trade names, copyrights and other
intellectual properties that are contained in the NetRadio Website(s)
or the Products to be sold by NetRadio, and has (ii) procured the
right to grant the rights contemplated by this Agreement.
(b) NETRADIO INDEMNIFICATION. NetRadio shall indemnify Navarre and hold
Navarre harmless from and against any and all claims, costs, or
damages arising from any claim relating to Paragraph 9(a) above.
(c) NAVARRE RIGHTS. Navarre represents and warrants to NetRadio that it
has (i) used best-practices to obtain the sufficient rights to all the
code, documentation, trademarks, trade names, copyrights and other
intellectual properties that are used in Navarre's business or the
Products to be sold by Navarre, and has (ii) procured the right to
grant the rights contemplated by this Agreement.
(d) NAVARRE INDEMNIFICATION. Navarre shall indemnify NetRadio and hold
NetRadio harmless from and against any and all claims, costs, or
damages arising from any claim relating to Paragraph 9(c) above.
(e) AUTHORITY. Each party represents to the other party that it has
authority to enter into this Agreement and to carry out the
transactions contemplated herein.
10. TERMINATION. Either party may terminate this Agreement upon thirty (30)
days' written notice under the following conditions:
(a) MUTUAL BREACH. On thirty (30) days written notice, for material breach
of the terms by the other party hereof unless the breach is cured in
the said thirty (30) days; or
(b) CEASE BUSINESS. Immediately if the other party shall cease conducting
business in the normal course for more than 10 days; or
-12-
EXHIBIT 10.10 CONFIDENTIAL TREATMENT REQUESTED
--------------------------------
Certain information has been omitted from this exhibit
and filed separately with the SEC pursuant to a request
for confidential treatment under Rule 406
(c) INSOLVENCY. Immediately if the other party becomes
insolvent, makes a general assignment for the benefit of
creditors, suffers or permits the appointment of a receiver
provided such action is not dismissed within sixty (60) days;
or
(d) DISCONTINUATION. Navarre or NetRadio delivers to the other
party a 30-day written notice of termination for a material
breach of this Agreement, provided such breach was previously
identified by way of written notice and the other party failed
to resolve such breach within thirty (30) days; or
(e) DISCONTINUATION. Navarre discontinues fulfillment services
to online customers or NetRadio discontinues the online sale
of pre-recorded music.
11. DISPUTES AND RESOLUTIONS. The Agreement shall be governed by the laws of the
United States and the State of Minnesota (without regard to its principles of
conflicts of laws) and without regard to any state or federal provision
providing for the interpretation of an agreement more strongly against the
drafter thereof. Both parties expressly reject the application of the United
Nations Convention on Contracts for the International Sale of Goods. All
disputes related to this Agreement shall be subject to the jurisdiction of the
United States Federal Court in Minneapolis, Minnesota. Provided, however, that
this clause shall not be construed to limit or preclude either party from
bringing any action in any court of competent jurisdiction for an injunction or
other provisional relief as either party deems to be necessary or appropriate to
compel either party to fulfill its obligations hereunder or to protect the
trademark or other proprietary rights of either party.
12. MISCELLANEOUS PROVISIONS.
(a) AGREEMENT NOT TO CONSTITUTE JOINT VENTURE. Nothing in this Agreement
shall be construed as making either NetRadio or Navarre the agent of,
or in joint venture with, the other for any purposes except as
specifically set forth herein.
(b) ASSIGNMENT. This Agreement and the rights and obligations hereunder
shall not be assigned by either party without the prior written
consent of the other party.
(c) ENTIRE AGREEMENT. This Agreement represents the final, complete and
understanding of every kind or nature whatsoever between the parties
hereto concerning this subject.
(d) COVENANTS. The covenants contained in this Agreement which, by their
terms, expressed or implied, require performance by the parties after
the expiration or
-13-
EXHIBIT 10.10 CONFIDENTIAL TREATMENT REQUESTED
--------------------------------
Certain information has been omitted from this exhibit
and filed separately with the SEC pursuant to a request
for confidential treatment under Rule 406
termination of this Agreement, shall be enforceable notwithstanding
said expiration or other termination of this Agreement for any reason
whatsoever.
(e) SUCCESSORS AND ASSIGNS. The covenants, conditions and obligations
herein contained shall apply to and bind any heirs, successors or
assigns of the parties hereto.
(f) WAIVER. No waiver by Navarre of any breach or series of breaches or
defaults in performance by NetRadio and no failure, refusal, delay or
neglect of Navarre to exercise any right, power, or option given to it
hereunder or to insist upon strict compliance with or performance of
Navarre's obligations under this Agreement shall constitute a waiver
of the provisions of this Agreement with respect to any subsequent
breach thereof or a waiver by Navarre of its right at any time
thereafter to require exact and strict compliance with the provisions
thereof.
(g) FORCE MAJEURE. Notwithstanding any provisions of this Agreement to the
contrary, neither party shall be liable to the other, nor shall any
breach of this Agreement occur, by reason of any delay or loss
reasonably incurred by acts of God, fire, natural disaster,
governmental order, materials shortages, war, riot or insurgency, work
stoppage or strike, or other such occurrence.
(h) SALES. The Products subject to this Agreement shall be sold,
advertised, and promoted by NetRadio in accordance with all applicable
laws, rules, and regulations, and the policies and methods of sale,
advertising, and promotion shall be of high standard and shall in no
manner reflect adversely upon Navarre. It is expressly understood that
it is the responsibility of NetRadio to comply with all applicable
regulations, including but not limited to, licensing, royalty and
copyright requirements. Additionally, it is the sole responsibility of
NetRadio to pay all duties, tariffs and taxes relating to sale of the
Products.
(i) SEVERABILITY. This Agreement is severable and the invalidity of any
term or condition shall not affect the validity of any other term or
condition. Nothing contained in this Agreement shall be construed as
requiring the commission of any act contrary to the law. Whenever
there is any conflict between any provisions of this Agreement and any
present or future statute, ordinance, or regulation contrary to which
the parties have no legal right to contract, the latter shall prevail,
but in such event the provision of this Agreement thus affected shall
be curtailed and limited to only the extent necessary to bring it
within the requirements of law. In the event that any part, article,
paragraph, sentence, or clause of this Agreement shall be held to be
indefinite, invalid, or otherwise unenforceable, the indefinite,
invalid, or unenforceable
-14-
EXHIBIT 10.10 CONFIDENTIAL TREATMENT REQUESTED
--------------------------------
Certain information has been omitted from this exhibit
and filed separately with the SEC pursuant to a request
for confidential treatment under Rule 406
provision shall be deemed deleted, and the remaining part of the
Agreement shall continue in full force and effect, unless said
provision pertains to the payment of fees in which case this Agreement
shall terminate. If any tribunal or court of appropriate jurisdiction
deems any provision hereof, other than for the payment of money,
unenforceable, such provision shall be modified only to the extent
necessary to render it enforceable and this Agreement shall be valid
and enforceable and the parties hereto agree to be bound by and
perform same as thus modified.
(j) INCORPORATION OF EXHIBITS. The provisions set forth in Exhibits A and
B as may be updated from time to time by Navarre, are a part hereof as
if fully incorporated into this document, and shall supersede the
terms and conditions of the body of this Agreement to the extent that
they are inconsistent with the same.
(k) COUNTERPARTS. This Agreement may be executed in various counterparts
or copies, all of which, when taken together, shall constitute the
entire agreement.
(l) AMENDMENTS. All amendments or modifications to this Agreement must be
in writing and signed by all parties to this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.
NAVARRE CORPORATION, NETRADIO CORPORATION,
a Minnesota corporation a Minnesota corporation
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------- -----------------------------
Its: President Its: President and C.E.O.
-15-
EXHIBIT 10.10 CONFIDENTIAL TREATMENT REQUESTED
--------------------------------
Certain information has been omitted from this exhibit
and filed separately with the SEC pursuant to a request
for confidential treatment under Rule 406
EXHIBIT A
PRICING SHEET and PAYMENT SCHEDULE
Pricing Sheet
MANUFACTURERS
SUGGESTED CD CASSETTE PRIMARY PRODUCT
LIST PRICE COST COST CATEGORIES
---------- ---- ---- ----------
[Confidential [Confidential [Confidential
Treatment Requested] Treatment Treatment
Requested] Requested]
Cassette Singles
Budget Cass (BMG, UNI) CD
Singles/Cass Maxi
Budget Cassette (PGD, Sony) Cassette
Maxi
CD5
CD5
Midline Cass/Budget CDs
Frontline Bass/Budget CDs (BMG,
CEMA, PGD, Sony, WEA)
Premium Frontline Cass
Budget CD - UNI Midline CD (All Majors)
Premium Frontline CS
Developing Artist Frontline CD
Frontline CD
Frontline CD
Frontline CD
EXHIBIT 10.10 CONFIDENTIAL TREATMENT REQUESTED
--------------------------------
Certain information has been omitted from this exhibit
and filed separately with the SEC pursuant to a request
for confidential treatment under Rule 406
Frontline CD
* NetRadio terms are [Confidential Treatment Requested]
EXHIBIT 10.10 CONFIDENTIAL TREATMENT REQUESTED
--------------------------------
Certain information has been omitted from this exhibit
and filed separately with the SEC pursuant to a request
for confidential treatment under Rule 406
EXHIBIT B
SHIPPING & HANDLING CHARGES
NetRadio will pay the following Shipping and Handling costs:
- For each Domestic order:
First unit @ [Confidential Treatment Requested]
Each additional unit @ [Confidential Treatment Requested],
maximum of [Confidential Treatment Requested] per order
- For each International order:
First unit @ [Confidential Treatment Requested]
Each additional unit @ [Confidential Treatment Requested];
maximum of [Confidential Treatment Requested] per order