Exhibit 10.26
CONFIDENTIAL TREATMENT **Confidential treatment has been
HAS BEEN REQUESTED FOR requested with respect to the
CERTAIN PORTIONS OF THIS information contained within the
DOCUMENT "[**]" markings. Such marked
portions have been omitted from
this filing and have been filed
separately with the Securities and
Exchange Commission
eCommerce Agreement
Between
▇▇▇▇▇▇▇▇.▇▇▇ and ▇▇▇▇▇▇.▇▇▇
This eCommerce and Content Agreement (this "Agreement") is made as of
December 23, 1999 (the "Effective Date"), by and between ▇▇▇.▇▇▇, a division of
▇▇▇▇▇▇▇▇.▇▇▇, Inc., a Delaware corporation with principal offices at ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ("Snowball") and
▇▇▇▇▇▇.▇▇▇, Inc., a Delaware corporation with principal offices at ▇▇▇▇
▇▇▇/▇▇/ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("▇▇▇▇▇▇.▇▇▇").
Background
Snowball owns and operates five sites featuring editorial content about
games, movies, tv, science fiction, and entertainment issues for young men (the
"IGN Sites"). The IGN Sites connect to a network of affiliates sites (the "IGN
Affiliate Sites") to provide a greater breadth and depth of entertainment
content. The IGN Sites and the IGN Affiliate Sites are sometimes referred to,
collectively, in this Agreement as the "IGN Network."
Snowball also owns and operates three other networks: the "ChickClick
Network," targeted at young women (the hub site for which is located at
▇▇▇.▇▇▇▇▇▇▇▇▇▇.▇▇▇) and the "PS/IG Network," targeted at college students (the
hub sites for which are located at ▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ and
▇▇▇.▇▇▇▇▇▇▇▇▇▇▇.▇▇▇).
The IGN Network, ChickClick Network and PS/IG Network are collectively
referred to in this Agreement as the "snowball Network(s). The IGN Affiliate
Sites and participating sites of the affiliates of the ChickClick network and
PS/IG Network are collectively referred to in this Agreement as the "snowball
Affiliates".
▇▇▇▇▇▇.▇▇▇ sells CDs (including related merchandise) and provides content
about CD music, through its World Wide Web site located at ▇▇▇.▇▇▇▇▇▇.▇▇▇ (the
"▇▇▇▇▇▇.▇▇▇ Site").
▇▇▇▇▇▇.▇▇▇ wishes to be the exclusive CD retailer on the snowball Networks
and to have links established from the snowball network hub sites to the
▇▇▇▇▇▇.▇▇▇ Site (each, a "▇▇▇▇▇▇.▇▇▇ Link"). Snowball has agreed to establish
those links on the snowball Network hub sites and to establish a program to
encourage snowball Affiliates to place similar links on each of the snowball
Affiliates sites (the "▇▇▇▇▇▇.▇▇▇ Program"), subject to the terms and conditions
of this Agreement.
Now Therefore, the parties agree as follows:
1. Exclusivity. Subject to the terms and conditions of this Agreement,
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snowball will identify ▇▇▇▇▇▇.▇▇▇ as ▇▇▇▇▇▇▇▇.▇▇▇'s "exclusive CD retailer" on
each snowball
Network. ▇▇▇▇▇▇▇▇.▇▇▇ will not, during the term of this Agreement, enter into
any agreement to promote a website operator as a recommended retailer of CDs or
to establish a promotional program for snowball Affiliates similar to the
▇▇▇▇▇▇.▇▇▇ Program. The exclusivity described in this section applies to the
sale of CDs only and expressly does not apply to rental of CDs, electronic
direct delivery of music whether or not recordable on read/write or other CDs
for home use, nor does it apply to merchandise related to CDs generally. In
addition, ▇▇▇▇▇▇.▇▇▇ acknowledges that ▇▇▇▇▇▇▇▇.▇▇▇ may incorporate or link to
Web and other auctionfacilities and that the sale of CDs by third parties
through such facilities will not be a breach of ▇▇▇▇▇▇▇▇.▇▇▇'s obligations under
this section.
2. Promotion and eCommerce. Subject to the terms and conditions of this
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Agreement:
2.1 Registration.
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(a) New Registrations. ▇▇▇▇▇▇▇▇.▇▇▇ will make available the
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opportunity to each user registering with a snowball Network the simultaneous
opportunity of an "opt out" registration for ▇▇▇▇▇▇.▇▇▇. For purposes of this
paragraph, "opt out" registration means an automatic functionality for dual
registration of the user on both the snowball Network and on ▇▇▇▇▇▇.▇▇▇ unless
the user opts, using an offered functional indicator, not to register with
▇▇▇▇▇▇.▇▇▇
(b) Existing Registered Users. ▇▇▇▇▇▇▇▇.▇▇▇ will send each
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▇▇▇▇▇▇▇▇.▇▇▇ Network user registered as of the Effective Date an email message
describing ▇▇▇▇▇▇.▇▇▇'s various offers and services, as well as informing them
of the relationship between ▇▇▇▇▇▇▇▇.▇▇▇ and ▇▇▇▇▇▇.▇▇▇ under this Agreement.
Such email message will include a link allowing users to add their email
addresses to the ▇▇▇▇▇▇.▇▇▇ database of snowball Network users.
(c) Reporting. ▇▇▇▇▇▇▇▇.▇▇▇ will provide to ▇▇▇▇▇▇.▇▇▇ a monthly
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report of all registration data for each ▇▇▇▇▇▇▇▇.▇▇▇ Network user who registers
in that month with ▇▇▇▇▇▇.▇▇▇ through the "opt out" registration described
above.
2.2 "My Page" Integration.
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(a) New Users. ▇▇▇▇▇▇▇▇.▇▇▇ will integrate content from the
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▇▇▇▇▇▇.▇▇▇ site into ▇▇▇▇▇▇▇▇.▇▇▇'s customizable "My Page" sections developed
for new users. ▇▇▇▇▇▇▇▇.▇▇▇ will work with ▇▇▇▇▇▇.▇▇▇ to find ways to provide
custom content from ▇▇▇▇▇▇.▇▇▇ to ▇▇▇▇▇▇▇▇.▇▇▇ users.
(b) Existing Users. For existing registered snowball Network users,
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▇▇▇▇▇▇▇▇.▇▇▇ will include a ▇▇▇▇▇▇.▇▇▇ listing in the "My Page" profile update
page, permitting users to choose to receive content from ▇▇▇▇▇▇.▇▇▇.
2.3 Integrated Content. ▇▇▇▇▇▇▇▇.▇▇▇ will integrate ▇▇▇▇▇▇.▇▇▇ branding
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and links into entertainment content pages on snowball Network hub site pages
that ▇▇▇▇▇▇▇▇.▇▇▇ reasonably deems to be contextually appropriate for such
branding and links (i.e. deemed appropriate for promoting CD sales).
2.4 Co-Branded Music Stores. ▇▇▇▇▇▇▇▇.▇▇▇ and ▇▇▇▇▇▇.▇▇▇ will work
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together to develop co-branded music retailing functionality ("Music Stores") to
be hosted and served by ▇▇▇▇▇▇▇▇.▇▇▇ on each snowball Network hub site. The
Music Stores will each include co-branded commerce pages and will feature CDs
that can be purchased at ▇▇▇▇▇▇.▇▇▇. ▇▇▇▇▇▇.▇▇▇ will be solely responsible for
pricing and fulfilling orders placed with such music stores. The look and feel,
as well as the specific functionalities of the Music Stores, will be developed
jointly by the parties and subject to the agreement of both parties, which
agreement will not be unreasonably withheld.
2.5 Web Page Advertising and Links.
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(a) Banner Impressions. ▇▇▇▇▇▇▇▇.▇▇▇ will work to ensure that at
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least [**] banner impressions promoting ▇▇▇▇▇▇.▇▇▇ appear on
snowball Network pages delivered each month, with such impressions to have an
approximate configuration of at least 468 x 60 pixels.
(b) Button Impressions. ▇▇▇▇▇▇▇▇.▇▇▇ will deliver on snowball
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Network pages served an average of [**] guaranteed button impressions per month
promoting ▇▇▇▇▇▇.▇▇▇.
(c) Portal Link. ▇▇▇▇▇▇▇▇.▇▇▇ will provide (during the term of this
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Agreement) a permanent hyperlink to the ▇▇▇▇▇▇.▇▇▇ site on ▇▇▇▇▇▇▇▇.▇▇▇'s its
"Affiliate Commerce portal", which ▇▇▇▇▇▇▇▇.▇▇▇ will encourage snowball
Affiliates to place on all ▇▇▇▇▇▇▇▇.▇▇▇ Affiliate site commerce pages (estimated
to provide [**] impressions per month).
(d) Navigation Bar Link Impressions. ▇▇▇▇▇▇▇▇.▇▇▇ will work to
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ensure that a button promoting ▇▇▇▇▇▇.▇▇▇ will be incorporated into the
navigation bar on all snowball Network hub site pages (estimated by the parties
to be a minimum of [**] impressions per month).
(e) Generally. ▇▇▇▇▇▇▇▇.▇▇▇ and ▇▇▇▇▇▇.▇▇▇ agree promotional
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banners and buttons may be used to promote any merchandise sold by ▇▇▇▇▇▇.▇▇▇
and are not intended to be limited to promoting CDS or other music product
sales.
(f) Sole Remedy for any Deficiency. ▇▇▇▇▇▇▇▇.▇▇▇'s obligation and
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▇▇▇▇▇▇.▇▇▇'s sole right in the event that ▇▇▇▇▇▇▇▇.▇▇▇ fails to deliver the
above listed numbers for banner, button, and navigation bar link impressions
will be for ▇▇▇▇▇▇▇▇.▇▇▇ to deliver any deficiency, as soon as practicable in
subsequent months.
**Confidential treatment has been
requested with respect to the
information contained within the
"[**]" markings. Such marked portions
have been omitted from this filing
and have been filed separately with
the Securities and Exchange Commission
2.6 Email Promotions. ▇▇▇▇▇▇▇▇.▇▇▇ will transmit a 40-word text link
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contained within its monthly emailing to snowball Network registered users
(estimated by the parties to be transmitted to [**]one million users).
3. Additional Marketing Opportunities.
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3.1 snowball CD Promotions. ▇▇▇▇▇▇▇▇.▇▇▇ will provide ▇▇▇▇▇▇.▇▇▇ with a
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first right of negotiation for any ▇▇▇▇▇▇▇▇.▇▇▇ on-line and off-line CD
marketing programs and promotional events. Accordingly, ▇▇▇▇▇▇▇▇.▇▇▇ will
provide ▇▇▇▇▇▇.▇▇▇ with notice reasonable under the circumstances of such
pending programs and events and, if requested by ▇▇▇▇▇▇.▇▇▇, negotiate in good
faith to provide ▇▇▇▇▇▇.▇▇▇ the opportunity to participate as the exclusive
retailer in such programs and events.
3.2 Kabang CD Promotions. ▇▇▇▇▇▇.▇▇▇ will provide ▇▇▇▇▇▇▇▇.▇▇▇ with a
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first right of negotiation for any ▇▇▇▇▇▇▇▇.▇▇▇ on-line and off-line CD
marketing programs and promotional events. Accordingly, ▇▇▇▇▇▇.▇▇▇ will provide
▇▇▇▇▇▇▇▇.▇▇▇ with notice reasonable under the circumstances of such pending
programs and events and, if requested by ▇▇▇▇▇▇▇▇.▇▇▇, will negotiate in good
faith to provide ▇▇▇▇▇▇▇▇.▇▇▇ the opportunity to participate as the exclusive
membership web content network operator in such programs and events.
3.3 ▇▇▇▇▇▇▇▇.▇▇▇ Press Releases. ▇▇▇▇▇▇▇▇.▇▇▇ agrees to mention
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▇▇▇▇▇▇.▇▇▇ in press releases ▇▇▇▇▇▇▇▇.▇▇▇ reasonably deems relevant to music
retailing.
3.4 ▇▇▇▇▇▇.▇▇▇ Press Releases. ▇▇▇▇▇▇.▇▇▇ agrees to mention ▇▇▇▇▇▇▇▇.▇▇▇
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in press releases ▇▇▇▇▇▇.▇▇▇ reasonably deems relevant to ▇▇▇▇▇▇▇▇.▇▇▇'s target
market of adolescents and young adults.
4. Organizational Support. ▇▇▇▇▇▇▇▇.▇▇▇ will allocate resources and use
----------------------
diligent efforts to provide competent and effective administrative and technical
support to encourage snowball Network users to receive ▇▇▇▇▇▇.▇▇▇ site content
and services.
5. Additional Strategic Opportunities. ▇▇▇▇▇▇.▇▇▇ will explore, consider in
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good faith opportunities and cooperate to implement strategic business
relationships involving eCommerce, web content and related format and technology
advances that are mutually beneficial among ▇▇▇▇▇▇.▇▇▇, ▇▇▇▇▇▇▇▇.▇▇▇ and others
that the parties agree upon.
6. Compensation.
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6.1 Payment Terms. On or before December 31, 1999, the parties will
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negotiate, set forth as Exhibit A and attach to this Agreement payment terms and
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conditions under which ▇▇▇▇▇▇.▇▇▇ will compensate ▇▇▇▇▇▇▇▇.▇▇▇ for performing
this Agreement. Payments not made when due will bear interest at the rate of
[**] per month on the unpaid balance, or the highest rate permitted by
applicable laws, whichever is lower. Payments will be made in U.S. Dollars.
**Confidential treatment has been
requested with respect to the
information contained within the
"[**]" markings. Such marked portions
have been omitted from this filing
and have been filed separately with
the Securities and Exchange Commission
6.2 Taxes. All amounts payable under this Agreement are exclusive of all
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sales, use, value-added, withholding, and other taxes and duties. ▇▇▇▇▇▇.▇▇▇
will pay all taxes and duties assessed in connection with this Agreement and its
performance by any authority within or outside of the U.S., except for taxes
payable on ▇▇▇▇▇▇▇▇.▇▇▇'s net income. ▇▇▇▇▇▇▇▇.▇▇▇ will be promptly reimbursed
by ▇▇▇▇▇▇.▇▇▇ for any and all taxes or duties that ▇▇▇▇▇▇▇▇.▇▇▇ may be required
to pay in connection with this Agreement or its performance.
6.3 Records and Audit Rights. ▇▇▇▇▇▇.▇▇▇ will keep all records relating
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to all purchasing data relevant to this Agreement for a period of three (3)
years after such sale/impression record period. An independent certified public
accountant selected by ▇▇▇▇▇▇▇▇.▇▇▇ and reasonably acceptable to ▇▇▇▇▇▇.▇▇▇ may,
no more than once per year and upon at least twenty-four (24) hours notice,
inspect such records during normal business hours. If, upon performing such
audit, it is determined that ▇▇▇▇▇▇.▇▇▇ has underpaid ▇▇▇▇▇▇▇▇.▇▇▇ by an amount
greater than five percent (5%) of the payments due ▇▇▇▇▇▇▇▇.▇▇▇ in the period
being audited, ▇▇▇▇▇▇.▇▇▇ will bear all reasonable expenses and costs of such
audit in addition to its obligation to make full payment under this section.
6.4 Reporting. During the term of this Agreement, ▇▇▇▇▇▇.▇▇▇ will provide
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monthly reports to ▇▇▇▇▇▇▇▇.▇▇▇ setting forth all relevant purchasing data
regarding purchases made by snowball Network users and the number and identity
of snowball Network users who register with ▇▇▇▇▇▇.▇▇▇ through the snowball
Networks.
7. Licenses, Other Proprietary Rights and Related Matters. Subject to the
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terms and conditions of this Agreement:
7.1 ▇▇▇▇▇▇.▇▇▇ Content License. ▇▇▇▇▇▇.▇▇▇ hereby grants to ▇▇▇▇▇▇▇▇.▇▇▇
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a nonexclusive, nontransferable license (without the right to sublicense) to
copy and publicly display on the snowball Networks content from the ▇▇▇▇▇▇.▇▇▇
site ("Kabang Content") solely to promote ▇▇▇▇▇▇.▇▇▇ and its site and otherwise
perform this Agreement. ▇▇▇▇▇▇▇▇.▇▇▇ may reformat the ▇▇▇▇▇▇.▇▇▇ Content for
the purpose of incorporating it into the snowball Network sites. ▇▇▇▇▇▇▇▇.▇▇▇
will not modify, use, copy or distribute the ▇▇▇▇▇▇.▇▇▇ Content, except as
expressly provided in this Agreement.
7.2 snowball Trademark License. ▇▇▇▇▇▇▇▇.▇▇▇ hereby grants ▇▇▇▇▇▇.▇▇▇ a
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nonexclusive, revocable, worldwide license to use the snowball's trademarks,
service marks and logos ("snowball Marks") solely in conjunction with the links
described in this Agreement. Any use of the snowball Marks must comply with
▇▇▇▇▇▇▇▇.▇▇▇'s approvals, requirements and any trademark guidelines communicated
by ▇▇▇▇▇▇▇▇.▇▇▇. Any such use and will inure to ▇▇▇▇▇▇▇▇.▇▇▇'s benefit.
Nothing contained in this Agreement gives ▇▇▇▇▇▇.▇▇▇ any right, title or
interest in the snowball Marks or goodwill therein and thereto, except as
expressly provided in this section. ▇▇▇▇▇▇.▇▇▇ will not take any action
inconsistent with the snowball's ownership rights. ▇▇▇▇▇▇.▇▇▇
will cease all use and display of the snowball Marks upon written notice from
▇▇▇▇▇▇▇▇.▇▇▇ and, in any event, upon termination of this Agreement.
7.3 ▇▇▇▇▇▇.▇▇▇ Trademark License. ▇▇▇▇▇▇.▇▇▇ hereby grants ▇▇▇▇▇▇▇▇.▇▇▇ a
----------------------------
nonexclusive, revocable, worldwide license to use ▇▇▇▇▇▇.▇▇▇'s trademarks,
service marks and logos ("▇▇▇▇▇▇.▇▇▇ Marks") solely in conjunction with the
links described in this Agreement. Any use of the ▇▇▇▇▇▇.▇▇▇ Marks must comply
with ▇▇▇▇▇▇.▇▇▇'s approvals, requirements and any trademark guidelines
communicated by ▇▇▇▇▇▇.▇▇▇. Any such use and will inure to ▇▇▇▇▇▇.▇▇▇'s benefit.
Nothing contained in this Agreement gives ▇▇▇▇▇▇▇▇.▇▇▇ any right, title or
interest in the ▇▇▇▇▇.▇▇▇ Marks or goodwill therein and thereto, except as
expressly provided in this section. ▇▇▇▇▇▇▇▇.▇▇▇ will not take any action
inconsistent with the snowball's ownership rights. ▇▇▇▇▇▇▇▇.▇▇▇ will cease all
use and display of the ▇▇▇▇▇▇.▇▇▇ Marks upon written notice from ▇▇▇▇▇▇.▇▇▇ and,
in any event, upon termination of this Agreement.
7.4 Ownership. Subject to the rights expressly granted in this Agreement,
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▇▇▇▇▇▇▇▇.▇▇▇ will retain all right, title and interest in and to the snowball
Networks and (and all related sites), the snowball Marks and the snowball
Content. ▇▇▇▇▇▇.▇▇▇ will retain all right title and interest in and to the
▇▇▇▇▇▇.▇▇▇ Site, the ▇▇▇▇▇▇.▇▇▇ Marks and the ▇▇▇▇▇▇.▇▇▇ Content.
7.5 ▇▇▇▇▇▇▇▇.▇▇▇ Discretion. Unless expressly provided in this Agreement,
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the form, format and position of any ▇▇▇▇▇▇.▇▇▇ link or advertisement described
in this Agreement, and date of placement, will be determined by ▇▇▇▇▇▇▇▇.▇▇▇ in
its discretion. ▇▇▇▇▇▇▇▇.▇▇▇ may, upon written notice to ▇▇▇▇▇▇.▇▇▇, reject any
content provided by ▇▇▇▇▇▇.▇▇▇ under this Agreement if it fails to comply with
▇▇▇▇▇▇▇▇.▇▇▇'s reasonable requirements or is otherwise inappropriate for the
users of the ▇▇▇▇▇▇▇▇.▇▇▇ Network sites. Nothing in this Agreement will be
construed to limit ▇▇▇▇▇▇▇▇.▇▇▇'s right to modify any of the content or any
aspect of structure of the ▇▇▇▇▇▇▇▇.▇▇▇ Network sites, or to rename or
reposition the ▇▇▇▇▇▇▇▇.▇▇▇ Network sites, in its discretion; provided that, in
the event any such change affects ▇▇▇▇▇▇▇▇.▇▇▇'s ability to perform any
obligation described in this Agreement, ▇▇▇▇▇▇▇▇.▇▇▇ will provide reasonable
alternative performance.
7.6 ▇▇▇▇▇▇.▇▇▇ Site Information. ▇▇▇▇▇▇.▇▇▇ will provide ▇▇▇▇▇▇▇▇.▇▇▇
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with any information reasonably required to implement links from the snowball
Networks to the ▇▇▇▇▇▇.▇▇▇ site. ▇▇▇▇▇▇.▇▇▇ will give ▇▇▇▇▇▇▇▇.▇▇▇ reasonable
advance notice in the event ▇▇▇▇▇▇.▇▇▇ changes its universal record locator
(URL) for the ▇▇▇▇▇▇.▇▇▇ site.
8. Confidential Information.
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8.1 Obligations. Each party ("Receiving Party") agrees to treat as
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confidential all proprietary information disclosed to it by the other party
("Disclosing Party") including marketing information, customer data, any data
described herein and the terms
of this Agreement ("Confidential Information"). Receiving Party agrees not to
publish or disclose the Disclosing Party's Confidential Information to others
except to those employees and subcontractors to whom disclosure is necessary in
order to carry out the purposes of this Agreement. All tangible materials
embodying such Confidential Information will remain the sole property of
Disclosing Party and will be delivered to Disclosing Party by Receiving Party
upon Disclosing Party's request. Receiving Party will inform all its employees
and subcontractors who receive Confidential Information of the confidential
nature of such Confidential information and of their obligation to keep same
confidential and not to use it other than as permitted hereunder.
8.2 Exceptions. Neither party will have any obligation with respect to
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any Confidential Information which: (1) was rightfully known to Receiving Party
prior to receipt of such Confidential Information from Disclosing Party; (2) is
lawfully obtained by Receiving Party from a third party under no obligation of
confidentiality; (3) is or becomes generally known or available without any act
or failure to act by Receiving Party; (d) is developed independently by
Receiving Party. Either party may disclose the Confidential Information of the
Disclosing Party if required by court order or legal requirement and the party
subject to the order has given the other party a reasonable opportunity (and has
cooperated fully) to contest or limit the scope of such required disclosure
(including application for a protective order).
9. User Data.
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9.1 Ownership. Subject to the restrictions in this section and any rights
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to use the applicable data granted under this Agreement, ▇▇▇▇▇▇▇▇.▇▇▇ will own
snowball Network user registration data, and ▇▇▇▇▇▇.▇▇▇ will own ▇▇▇▇▇▇.▇▇▇ user
registration data and ▇▇▇▇▇▇.▇▇▇ sales data.
9.2 Treatment of Individually Identifiable User Data. Neither party will
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sell, disclose, transfer, or rent any user data obtained by it from the other
party which data identifies, or can be used to identify, a specific individual
("Individually Identifiable User Data") to any third party or use any
Individually Identifiable User Data on behalf of any third party, without the
express permission of the applicable user specifically approving such use. Each
of ▇▇▇▇▇▇▇▇.▇▇▇ and ▇▇▇▇▇▇.▇▇▇ will only use Individually Identifiable User Data
in accordance with the Terms of Service and Privacy Policy posted on the
snowball Network sites, as they may be amended from time to time by
▇▇▇▇▇▇▇▇.▇▇▇. In those cases where permission for disclosure of Individually
Identifiable User Data has been obtained from the applicable user, each party
will use all reasonable efforts to implement an "opt out" feature on its own
behalf, and will include and enforce through its agreements with third parties a
requirement for the inclusion of an "opt out" feature in all e-mail
communications generated by, or on behalf of, third party users of the
Individually Identifiable User Data.
9.3 Aggregate Data. Notwithstanding the restrictions above, the parties
--------------
retain the right to use, sell, disclose, transfer, or rent any user data as long
as such user data is in an aggregate form that does not include any Individually
Identifiable User Data.
10. Term and Termination.
--------------------
10.1 Term. This Agreement will commence on the Effective Date and remain
----
in effect for a period of [**] after the Start Date (the "Initial
Term"), unless terminated earlier under this Section 10. For purposes of this
Agreement, the Start Date shall be February 1, 2000.The parties recognize that
certain elements of the ▇▇▇▇▇▇.▇▇▇ promotional program described in this
Agreement may not be fully integrated by the Start Date, and have adjusted the
monthly billing set forth in Exhibit A to reflect that fact. If so requested by
either party by written notice to the other party within thirty (30) days of the
end of the Initial Term, the parties will negotiate in good faith to renew the
term of this Agreement, subject to any changes to the terms and conditions of
this Agreement required by one or both of the parties.
10.2 Termination for Benchmark Performance Failure. ▇▇▇▇▇▇.▇▇▇ may
---------------------------------------------
terminate this Agreement upon thirty (30) days written notice to ▇▇▇▇▇▇▇▇.▇▇▇ in
the event that by [**] after the Start Date ▇▇▇▇▇▇.▇▇▇ has not received through
the snowball Networks [**] or more user registrations, or made [**] or more
sales of (one or more) CDs to snowball Network users.
10.3 Termination for Breach or Insolvency. Either party may terminate this
------------------------------------
Agreement at any time prior to the expiration of its stated term in the event
that: the other party breaches any term or condition of this Agreement and
fails to cure such breach within thirty (30) days of written notice; or either
party becomes the subject of a voluntary petition in bankruptcy or any voluntary
proceeding relating to insolvency, receivership, liquidation, or composition for
the benefit of creditors; or either party becomes the subject of an involuntary
petition in bankruptcy or any involuntary proceeding relating to insolvency,
receivership, liquidation, or composition for the benefit of creditors, if such
petition or proceeding is not dismissed within sixty (60) days of filing.
10.4 Effect of Termination. ▇▇▇▇▇▇.▇▇▇'s payment obligations hereunder, as
---------------------
well as the provisions of this Section and the following Sections will survive
any termination of this Agreement: Section 6 (Compensation), Section 7.5
(Ownership), Section 8 (Confidential Information), Section 9 (User Data),
Section 11 (Limitation of Liability), Section 12 (Indemnification) and Section
13 (General).
11. Limitation of Liability. EXCEPT WITH RESPECT TO ITS OBLIGATIONS UNDER
-----------------------
SECTION 8 AND SECTION 9, NEITHER PARTY WILL BE LIABLE TO THE OTHER FOR ANY
INCIDENTAL, SPECIAL, OR CONSEQUENTIAL DAMAGES, OR ANY LOSS OR REVENUE, PROFITS,
OR DATA, ARISING IN CONNECTION WITH THIS AGREEMENT, EVEN IF SUCH PARTY HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
12. Indemnification.
---------------
**Confidential treatment has been
requested with respect to the
information contained within the
"[**]" markings. Such marked portions
have been omitted from this filing
and have been filed separately with
the Securities and Exchange Commission
12.1 ▇▇▇▇▇▇▇▇.▇▇▇ Obligations. ▇▇▇▇▇▇▇▇.▇▇▇ hereby agrees to defend,
------------------------
indemnify and hold harmless ▇▇▇▇▇▇.▇▇▇, and its directors, officers and
employees against any and all claims, actions, losses, damages, costs, and
expenses (including reasonable attorneys' fees, "Losses") arising out of or
based on any claim related to the ▇▇▇▇▇▇▇▇.▇▇▇ Content or the snowball Networks
other than those claims described in Section 12(b) below. ▇▇▇▇▇▇▇▇.▇▇▇'s
obligations under this section are hereby expressly conditioned on the
following: (1) ▇▇▇▇▇▇.▇▇▇ provides ▇▇▇▇▇▇▇▇.▇▇▇ with prompt notice of any such
claim; (2) ▇▇▇▇▇▇.▇▇▇ permits ▇▇▇▇▇▇▇▇.▇▇▇ to assume and control the defense of
such action, with counsel chosen by ▇▇▇▇▇▇▇▇.▇▇▇ (who will be reasonably
acceptable to ▇▇▇▇▇▇.▇▇▇); and (3) ▇▇▇▇▇▇.▇▇▇ provides ▇▇▇▇▇▇▇▇.▇▇▇ with any
information or assistance requested by ▇▇▇▇▇▇▇▇.▇▇▇, at ▇▇▇▇▇▇▇▇.▇▇▇'s expense.
12.2 ▇▇▇▇▇▇.▇▇▇'s Obligations. ▇▇▇▇▇▇.▇▇▇ hereby agrees to defend,
------------------------
indemnify and hold harmless ▇▇▇▇▇▇▇▇.▇▇▇, and its directors, officers and
employees against any and all Losses arising out of or based on any claim
related to the ▇▇▇▇▇▇.▇▇▇ site, any CDs, ▇▇▇▇▇▇.▇▇▇'s activities (or omissions)
with respect to any Customer or any content, information or other materials
provided to ▇▇▇▇▇▇▇▇.▇▇▇ under this Agreement. ▇▇▇▇▇▇.▇▇▇'s obligations under
this section are hereby expressly conditioned on the following: (1) ▇▇▇▇▇▇▇▇.▇▇▇
provides ▇▇▇▇▇▇.▇▇▇ with prompt notice of any such claim; (2) ▇▇▇▇▇▇▇▇.▇▇▇
permits ▇▇▇▇▇▇.▇▇▇ to assume and control the defense of such action, with
counsel chosen by ▇▇▇▇▇▇.▇▇▇ (who will be reasonably acceptable to
▇▇▇▇▇▇▇▇.▇▇▇); and (3) ▇▇▇▇▇▇▇▇.▇▇▇ provides ▇▇▇▇▇▇.▇▇▇ with any information or
assistance requested by ▇▇▇▇▇▇.▇▇▇, at ▇▇▇▇▇▇.▇▇▇'s expense.
13. General.
-------
13.1 Waivers/Modifications. Any waiver modification or amendment to any
---------------------
provision of this Agreement will be effective only if in writing and executed by
both parties. The waiver by either party of any default or breach of this
Agreement will not constitute a waiver of any other or subsequent default or
breach.
13.2 Notices. All notices required to be given under this Agreement will
-------
be deemed given when delivered personally or sent by confirmed facsimile or U.S.
certified mail, return receipt requested, to the address shown in the preamble
above, or as may otherwise be specified by either party to the other in writing.
13.3 Severability. If any provision of this Agreement is found illegal or
------------
unenforceable, it will be enforced to the maximum extent permissible, and the
legality and enforceability of the other provisions of this Agreement will
remain in full force and effect.
13.4 Governing Law. This Agreement will be governed by and construed in
-------------
accordance with the laws of the State of California applicable to agreements
entered into, and to be performed entirely, within California between California
residents.
13.5 No Partnership. The relationship of the parties hereto is solely that
--------------
of independent contractors, and not partners, joint venturers or agents.
Neither party has any authority to bind the other in connection with this
Agreement.
13.6 Entire Agreement. This Agreement, including any exhibits attached
----------------
hereto, is the complete and exclusive agreement between the parties with respect
to the subject matter hereof, and supersedes and replaces any and all prior or
contemporaneous agreements regarding such subject matter. The parties agree
that the letter of intent, dated as of December 9, 1999, between the parties is
hereby terminated and replaced in its entirety by this Agreement.
13.7 Force Majeure. Neither party will be liable to the other party as a
-------------
result of its failure to perform any obligation or duty under this Agreement,
other than the obligation to pay money, to the extent that such failure is cause
by flood, war, riot, civil insurrection, labor or material shortages, failure of
contractors to perform their obligations, or other events that are not
reasonably foreseeable or are beyond the reasonable control of the party.
13.8 No Assignment. Neither party may assign this Agreement without the
-------------
other party's written consent except in the event of a reorganization, merger,
consolidation or sale of all or substantially all of its assets related to this
Agreement. Such consent will not be unreasonably withheld. Any assignment in
violation of this section will be null and void.
13.9 Consolidated URL Listing. ▇▇▇▇▇▇.▇▇▇ hereby grants ▇▇▇▇▇▇▇▇.▇▇▇
------------------------
permission to include all of the URLs related to the pages served to CD
customers through the ▇▇▇▇▇▇▇▇.▇▇▇ Networks together with other snowball.com-
related URLs in a consolidated listing assembled by third-party measurement
companies, including but not limited to Media Metrix, NetRatings or another
similar measuring service selected by ▇▇▇▇▇▇▇▇.▇▇▇. ▇▇▇▇▇▇.▇▇▇ agrees that the
rights granted under this section are exclusive to ▇▇▇▇▇▇▇▇.▇▇▇ and that
▇▇▇▇▇▇.▇▇▇ will not grant the same or similar rights to any other party.
In Witness Whereof, the parties have entered into this Agreement as of the
Effective Date.
▇▇▇▇▇▇.▇▇▇, Inc. ▇▇▇▇▇▇▇▇.▇▇▇, inc.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------- -----------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇ Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------- ----------------------
Title: President & CEO Title: COO/CFO
------------------ -----------------------
EXHIBIT A
PAYMENT TERMS
▇▇▇▇▇▇.▇▇▇ will pay ▇▇▇▇▇▇▇▇.▇▇▇ a total participation fee of [**]. The
participation fee will be payable in [**] installments, due and payable as set
forth below: [**]
In addition to the participation fee set forth above, in the event that
▇▇▇▇▇▇.▇▇▇ generates more than [**] new purchasers through performance of this
Agreement, ▇▇▇▇▇▇.▇▇▇ will pay Snowball a [**] new purchaser fee for each new
purchaser in excess of [**]. Payment for new purchasers will be due monthly on
the fifteenth day of the month immediately following the month in which the new
purchaser first purchases any products from ▇▇▇▇▇▇.▇▇▇.
▇▇▇▇▇▇▇▇.▇▇▇ ▇▇▇▇▇▇.▇▇▇
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇
-------------------- ---------------------
Name (Print): ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Name (Print): ▇▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇
---------------- -----------------
Title: COO/CFO Title President & CEO
----------------------- --------------------------
Date: 1-3-00 Date: 12-23-99
------------------------- ---------------------------
**Confidential treatment has been requested
with respect to the information contained
within the "[**]" markings. Such marked
portions have been omitted from this filing
and have been filed separately with the
Securities and Exchange Commission.