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AEC ONE STOP GROUP, INC.
THE ALL-MUSIC GUIDE DATABASE LICENSE AND
CONSUMER DIRECT FULFILLMENT SERVICES AGREEMENT
1. SERVICES: AEC One Stop Group, Inc., hereafter referred to as ("AEC"),
itself and through its affiliated entities, will supply you, as an
Interactive Retailer (as an on-line store or otherwise similarly),
hereafter referred to as ("COMPANY"), with use of its All-Music
Guide(s) in electronic form (the "Audio Database"), will supply you
with updating and general service with regard thereto, and will perform
as the wholesale provider (i.e., fulfillment) of the musical
recordings, video and related products which you sell via your
Interactive Retailing. Particulars of such services and performance
standards shall be as contained in General Terms & Conditions Agreement
attached.
2. EXCLUSIVITY: In using AEC's Databases, and except as otherwise provided
herein, you agree to use such Database exclusively in connection with
your Interactive Retailing (i.e., not to use competitive services)
AEC's audio fulfillment services as a provider of first resort
regarding your Interactive Retail sales of audio product, and to use
AEC's video fulfillment services as a provider of first resort as to
your video product (also, as detailed further in attached General Terms
& Conditions).
As used herein, "provider of first resort" means that AEC shall be your
sole supplier of product in the AEC Availability File (as defined in
the General Terms and Conditions attached hereto) if such product is
Commercially Available (also defined in the General Terms and
Conditions).
Notwithstanding the foregoing, with respect to the third party
databases used and/or licensed by COMPANY or databases created by
COMPANY ("Other Databases"), COMPANY agrees as follows:
a. COMPANY may use such Other Databases, provided
COMPANY shall in no way co-mingle the AEC Databases
with the Other Databases or in any manner use any AEC
Database elements in the Other Databases; and
b. COMPANY shall in all respects identify and brand the
AEC Database elements in strict compliance with the
requirements of this agreement.
3. TERM: Three years from date hereof, unless extended or earlier
terminated by consent of the parties or pursuant to the General Terms &
Conditions attached hereto, e.g., if AEC fails to meet adequate
Performance Standards (as defined therein) or your sales levels for any
three month period (after a start-up period) average less than *** a
month.
4. FEES:
(i) FULFILLMENT SALES - NO SPECIAL FEE: Sales shall be fulfilled
at AEC's standard one-stop prices to the trade, as they exist
generally from time to time. Initial
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pricings are as provided in the General Terms & Conditions
attached hereto (see particularly Ex. I thereto) and
subsequent prices shall be generally noticed to the trade
and you by AEC.
(ii) DATABASE USE: License fees are based on you r aggregate site
fulfillment sales, referred to in Paragraph 4(i) above and are
as follows:
- *** of net monthly sales; against a monthly guaranteed
minimum amount of ***.
5. GENERAL TERMS AND CONDITIONS: Shipping and return policies and
procedures, credit card processing procedures, electronic interfacing
protocols, representations and warranties, choice of law provisions,
etc., are all as contained in the General Terms & Conditions attached,
and such terms and conditions are as integral part of this Agreement.
6. AEC authorizes use of the AEC DATABASES(S) to be used with the following
Internet-related applications.
(i) xxx.xxxxx.xxx
(ii) Third-party branded versions of xxx.xxxxx.xxx, known as
SmartStores. Tunes shall obtain AEC's prior written approval
of the terms on which the AEC DATABASE(S) and fulfillment
services will be used on each such SmartStore prior to its
launch. Such terms shall include without limitation (i) that
each such SmartStore shall brand the AEC DATABASE(S)
information as provided herein (ii) the confidentiality
requirements contained herein and Tunes agrees to insure that
an AEC proprietary information (e.g., AEC Database,
fulfillment technologies) will not be loaded or stored on any
other entities equipment outside of the xxxxx.xxx site.
(iii) Microsoft '98 Deluxe CD Player Application. Company agrees to
provide "All-Music Guide Review menu item within the Internet
Button on the MS Deluxe CD Player when an All-Music Guide
review is available on xxx.xxxxx.xxx for a CD being used with
the MS Deluxe CD Player. This menu item will link directly to
an All-Music Guide album review on xxx.xxxxx.xxx and will
allow the consumer to purchase a CD or similar item available
in the xxxxx.xxx store.
(iv) Other third-party CD Players Applications. Company agrees to
provide "All Music Guide Review" link to third-party CD Player
when an All-Music Guide review is available on xxx.xxxxx.xxx
for a CD being used with the third-party CD Player. This menu
item will link directly to an All-Music Guide album review on
xxx.xxxxx.xxx and will allow the consumer to purchase a CD or
similar item available in the xxxxx.xxx store. Tunes agrees to
get written permission from AEC prior to launching SmartStores
using All-Music Guide and AEC's fulfillment mechanisms.
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UPON YOUR SIGNATURE BELOW, AND RETURN OF THE COUNTERSIGNED AGREEMENT(S) TO AEC,
WE LOOK FORWARD TO COMMENCING OUR SERVICES, AND WORKING WITH YOU.
Agreed:
Company Name: JAMtv CORPORATION AEC ONE STOP GROUP, INC.
Name: Name:
-------------------------- ---------------------------
Signature: Signature:
-------------------------- ---------------------------
Title: Title:
-------------------------- ---------------------------
Date: Date:
-------------------------- ---------------------------
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GENERAL TERMS & CONDITIONS
FOR THE ALL-MUSIC GUIDE DATABASE LICENSE AND
CONSUMER DIRECT FULFILLMENT SERVICES AGREEMENT
1. BACKGROUND
1.1 COMPANY (as identified in the cover sheet hereto) is engaged in the
business of providing branded and private labeled interactive music content and
selling prerecorded audio and/or video products in all formats and related
products, by offering to individual consumers ("Customers") an interactive
retail purchasing service on an Internet web site or via any other substantially
equivalent electronic mechanism or mechanisms (i.e. an "On-Line Store");
1.2 COMPANY desires that AEC provide the database and fulfillment
services required to fulfill orders received from Customers.
1.3 An affiliate of AEC compiles (a) general interest music guides
containing, among other things, lists of artists, albums, ratings, review and
other information, and (b) general interest movie guides containing among other
things, lists of film starts, motion pictures, ratings, review and other
information, which are published under the trade name "All-Music Guide" and the
"All-Moving Guide", using the "AMG" and "MATRIX" logos and marks, and such
guides as published in electronic form are licensed to AEC. In addition, AEC
compiles a database which provides information regarding the availability and
pricing of record and video products (the "AEC Availability File"). The AEC
Availability File, and All-Music Guide, as published in electronic form, shall
be referred to collectively herein as either the "DATABASES";
1.4 AEC is in the business of wholesaling and fulfilling orders for
audio and video products.
2. AEC Services; Database and Fulfillment.
2.1 Database Services.
2.1.1 GENERAL LICENSE. AEC hereby grants to COMPANY a
non-exclusive license, without the right of sublicense, to use each of the
latest versions and releases of the DATABASES, along with the DATABASE
programs and data contained therein, including all future revisions,
enhancements and updates of the DATABASES in accordance with the terms of
this Agreement, and COMPANY agrees to use the licensed DATABASES solely for
the purposes of marketing and selling Commercially Available products (as
defined below) secured from AEC (via the fulfillment services provided for
herein) and sold via COMPANY's On-Line Store (as identified in the cover
sheet hereto).
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2.1.2 SPECIFIC SERVICES:
2.1.2.1 AEC shall provide COMPANY with the
DATABASES, and with updates of the DATABASES not less frequently than monthly
so as to make the information contained in the DATABASES current and complete
to the same extent as the versions of the DATABASES which are current at the
time the Agreement is executed, which versions have been reviewed by COMPANY,
except that the respect to the AEC Availability File, AEC shall be updated
daily or weekly, as mutually agreed by AEC and COMPANY. AEC shall deliver to
COMPANY pursuant to this Agreement, one(1) copy of the current DATABASES no
later than fourteen (14) days (unless otherwise agreed upon by both parties)
after the execution of the Agreement, and thereafter AEC shall deliver to
COMPANY one (1) updated copy of updates of the DATABASES no later than the
fifth day of each month (unless otherwise agreed upon by both parties) in a
format to be mutually agrees upon. Delivery shall be by FTP pick-up, at a
designated site for COMPANY's site, unless otherwise agreed by the parties.
Any expenses for any other method of delivery shall be borne by COMPANY.
2.1.2.2 AEC shall update, edit, compile or create
new data files for the DATABASES, including the linking of the DATABASES to
third party audio and video databases that contain UPC bar codes if approved
by AEC; but in such case COMPANY must deliver to AEC the complete databases
of such third parties and such databases must contain accurate UPC bar codes
for all formats (videocassette, laser discs, etc.). If COMPANY requires
additional linking beyond the UPC bar code, at the option of COMPANY this can
be arranged for fee to be agreed upon by COMPANY and AEC.
2.1.2.3 AEC shall provide appropriate maintenance
and support for the DATABASES to COMPANY personnel.
2.1.2.4 AEC shall have access to COMPANY's
databases as necessary to perform the AEC linking services. AEC shall have
reasonable access to staff and support personnel in order to assist in making
the DATABASES functional with services. In the event that COMPANY fails to
comply with its obligations under this Section 2.1.2.4 after fifteen (15)
days prior to written notice from AEC to COMPANY, to the extent that AEC is
made incapable of performing by such noncompliance, AEC's obligation to
perform shall be suspended for the duration of such noncompliance; however,
this Agreement shall in such event remain in full force and effect in all
other respects.
2.1.3 TITLE, DELIVERY AND COPIES.
2.1.3.1 COMPANY acknowledges and agrees that the
DATABASES and all revisions, modifications and enhancements thereof provided
by AEC to COMPANY under this Agreement are the exclusive and proprietary
information of AEC. Title and full ownership rights thereto, including but
not limited to copyright, trade secret, trademark, trade name and other
intellectual and proprietary rights, are reserved to, and shall remain with
and be the valuable property of AEC. COMPANY acknowledges the valuable,
proprietary nature of the DATABASES, including all revisions, modifications
and enhancements thereof, and agrees that irreparable injury will result from
any use, disclosure, reproduction or distribution of the
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DATABASES that is not authorized by this Agreement and agrees not to contest
in any way whatsoever the proprietary status of the DATABASES or AEC's
subsisting copyrights therein. COMPANY will not remove any proprietary or
confidential legends or markings which AEC has placed upon or within the
DATABASES.
2.1.3.2 COMPANY acknowledges that AEC may, at any
time or times during the term of this Agreement, substitute a new version of
the DATABASES for the version of the DATABASES originally provided hereunder;
in which case the license granted COMPANY shall cease with respect to the
replaced version of the version, and COMPANY shall purge all copies of the
replaced version from COMPANY's computer system and from any other computer
storage device or medium as to which COMPANY has or should have control
consistent with this license.
2.1.3.3. AEC acknowledges that COMPANY has
developed and will continue to develop Other Databases containing records
that include but are not limited to audio files, album cover images, track
titles, audio CD table of contents files (TOC files), record label companies,
music genres, Web users, Web customers, user collections, orders for music,
user play logs, user activity, user emails and user profiles.
2.2 FULFILLMENT SERVICES.
AEC shall supply to Customers the Products offered over COMPANY's
On-Line Store and ordered by the Customers (unless "Commercially Unavailable"
as provided below); and in connection therewith AEC shall perform the
fulfillment, technical, and professional services described below.
2.2.1 AEC FULFILLMENT SERVICES DEFINED.
2.2.1.1 INTERNET FULFILLMENT SITE. AEC will
interface with COMPANY's Internet fulfillment site (or equivalent) in one of
the following methods, as mutually agreed:
(i) Standard EDI file transmission to and from COMPANY
and AEC. Orders will be sent to AEC at mutually agreed pre-determined intervals.
Orders may be transmitted via the Internet (FTP), X. 12, an AEC bulletin board
or another mutually agreed method.
(ii) Advanced on-line connectivity in order to query or
commit for Customers in real fulfillment. AEC will provide and API Library
and/or code to implement the connection between Unix to Unix or NT to Unix
systems. Custom programming on COMPANY's web site to interface with AEC is the
responsibility of COMPANY.
2.2.1.2 PROCESSING ORDERS; SHIPPING PRODUCT. AEC
shall, upon AEC's receipt of a Verified Order (as hereinafter defined), (i)
process such order and (ii) arrange to have the Ordered Product (as
hereinafter defined) shipped to the Customer. All orders will be quality
controlled through advanced sorting and UPC verification methods. AEC will
have no
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obligation to accept orders for or to ship any time of Product which is
Commercially Unavailable (as hereinafter defined).
"Commercially Unavailable": A particular item is Commercially Unavailable if,
at the time the order for such item is received by AEC or during the process
of such order being fulfilled, such item is not in the inventory of AEC (at
AEC's sole commercial discretion) and 9a) is no longer manufactured; (b) is
not reasonably available to AEC from the company that releases such product;
or (c) has been deleted from the catalog of the company that releases such
items. To the extent such a product is Commercially Unavailable and COMPANY
can assist in AEC achieving availability, and AEC requests such assistant,
COMPANY shall use its good faith efforts to so assist. Notwithstanding the
foregoing, it is agreed that in the case of video products, COMPANY must
first place order(s) for fulfillment with AEC, but, if after discussion
and/or communication either verbally or electronically between AEC and
COMPANY on any video order, it appears AEC will have difficulty fulfilling
any such order on a timely basis, COMPANY, upon notifying AEC accordingly,
may price that particular order with an alternative supplier/fulfillment
house.
"Commercially Available": A particular item is Commercially Available if it
is in the AEC Availability File and it is not Commercially Unavailable.
"Ordered Product" shall mean the units of product ordered by a Customer with
a Verified Order.
"Verified Order" means an order that provides all of the information
specified in AEC technical documents and which has been authorized by AEC's
or Company's credit car contractor to be debited from the consumer's account.
Technical requirements include, but are not limited to, valid account,
address, credit card information and product related information. The AEC
credit car or Company credit card verification validates the consumer's
payment capability.
2.2.1.3 STICKERING OR OTHER SPECIAL HANDLING. There
will be no additional charge for stickering or any other COMPANY
identification label as long as there is no more than one label per unit and
it is compatible with AEC's material and handling technology. In addition,
AEC, at no charge, will insert promotional materials on behalf of COMPANY
with each shipment subject to the understanding that all AEC costs reasonably
associated with the inserts shall be borne by COMPANY, and that each insert
has a valid UPC code or similar number. Finally, all special handling
considerations shall be reviewed during formal operations meetings and it is
understood that AEC and COMPANY shall negotiate, in good faith, as to the
cost, if any, which will be charged for such special handling.
2.2.1.4 ACCOUNT REPRESENTATIVES. AEC will make
available account representatives who will be responsible for using
reasonable efforts to meet all customer service, product sales, and
technological needs.
2.2.1.5 TWO-WAY INTERACTION. AEC will communicate
interactively (batch or on-line) with COMPANY in an agreed method to provide
electronic updates on orders shipped, including shipping methods, tracking
numbers, fill, invoice totals, and all pertinent data reasonably requested by
COMPANY.
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2.2.1.6 RETAILER PACKAGING IDENTIFICATION. AEC
shall be an invisible fulfillment arm. AEC will produce custom invoices,
shipping labels and packaging consistent with AEC technologies and
capabilities that will accompany an order to identify the product/order as
from COMPANY.
2.2.1.7 CREDIT CARD PROCESSING. AEC, at COMPANY's
option, for all consumer direct fulfillment delivery, will perform all credit
card processing at *** CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR THIS
INFORMATION ***above fees charged by the applicable credit card merchant
clearing agreement. COMPANY shall be remitted a monthly statement no later
than 30 days after the end of the month detailing amounts paid by the
Customer and fulfillment prices and costs charged to COMPANY during the prior
month. COMPANY shall be remitted *** CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED FOR THIS INFORMATION *** along with the statement for the period
covered by the statement.
COMPANY acknowledges that the fees charged to AEC under its credit
card merchant clearing agreement currently represent *** CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED FOR THIS INFORMATION ***. COMPANY agrees that
the amount of such fees constitutes Confidential Information of AEC under
this Agreement, subject to the provision of Section 4 hereof.
If COMPANY is to handle transactions under its own merchant vendor and is
granted credit by AEC, payment will be due from company in accordance with
AEC's credit terms (see also Section 3.5.1 below).
2.2.2 Performance Standards for AEC.
2.2.2.1 FILL STANDARDS - AEC represents that each
fill percentage over any mutually agreed upon measurement period shall be ***
on commercially available product if ordered via AEC's on-line real time
communication and commitment system and *** if ordered via batch
communication (excluding, however, cut-outs, commercially unavailable
product, imports and selected product not available from vendors).
2.2.2.2 SHIPPING STANDARDS - *** of all product
orders (unless "Commercially Unavailable" as provided above) shall be shipped
from an AEC facility within cut-off times to be reasonably mutually
determined from time to time consistent with Section 2.2.3. below.
2.2.3 Shipping & Return Procedures.
2.2.3.1. SHIPPING. Daily cut-off times should be
reasonably mutually determined from time to time, but, currently, same day
service can be offered until 3:00 PM EST. Current methods of shipment
include: United States Postal Service and United Parcel Service. AEC shall
offer to COMPANY the full range of shipping options to Customers of
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COMPANY at *** CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR THIS INFORMATION
*** above fees normally charged by the shipping carriers.
COMPANY acknowledges that the shipping rates charged to AEC by its
shipping carrier represent *** CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR
THIS INFORMATION *** COMPANY agrees that such shipping rates constitute
Confidential Information of AEC under this Agreement, subject to the provisions
of Section 4 hereof.
2.2.3.2 RETURNS. COMPANY shall assume and pay for
all shipping and other costs incurred in the return, refused and
undeliverable, or exchange of Ordered Product. Notwithstanding the foregoing,
AEC shall be responsible for all Ordered Product either incorrectly shipped
to a Customer or damaged while in transit to the Customer, but only if such
Ordered Product was shipped via an insured and traceable carrier. In such
cases, AEC shall assume and pay for all shipping and other costs incurred in
the return or exchange of Ordered Product and will ensure that COMPANY incurs
no product cost for the involved transaction.
2.2.4 Prices, Costs, Fees.
2.2.4.1 FULFILLMENT PRICES. AEC shall initially
price Products at the standard one-stop published prices (the "Fulfillment
Prices"), which may be increased or decreased from time to time (e.g., when
the manufacturers of Product change their list prices to AEC). The
Fulfillment Prices as of the date of this Agreement are set forth in EXHIBIT
I hereto. The lower of the two prices reflected on such Exhibit I for Product
sold hereunder is the amount to be retained by or paid to AEC hereunder for
such sales.
2.2.4.2 SHIPPING COSTS; CREDIT CARD PROCESSING. In
addition to the Fulfillment Prices, COMPANY shall pay the costs of credit
card processing, packaging materials and shipping costs required to ship the
Products to the Customer.
3. COMPANY RESPONSIBILITIES.
COMPANY shall cooperate with AEC as required by this Agreement and
shall perform the responsibilities described in this Agreement, including
particularly, but without limitation, those more specifically described below:
3.1 TECHNICAL COOPERATION. COMPANY shall cooperate with AEC to
develop the technical linkages between COMPANY's Internet fulfillment site,
the DATABASES. If COMPANY requires the technical assistance and resources of
AEC's information technology experts beyond a "reasonable amount" (as
reasonably determined by AEC), then all such excess house shall be charged at
the then current rates of AEC's affiliated information technology consulting
services group. Such rates at January 1, 1998 were $110 per hour.
3.2 FEEDBACK WITH CUSTOMERS.
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3.2.1 COMPANY shall respond promptly and professionally to
Customers' question regarding the procedure for ordering Products and any
other questions regarding their orders. In communication with AEC in
connection with Customer's inquiries, COMPANY shall use e-mail or other
on-line connectivity to AEC whenever reasonably possible.
3.2.2 COMPANY will provide a feedback area on the Service
where users can notify COMPANY of corrections, additions, errors, and other
comments about the Databases and to forward those comment sot the All-Music
Guide Staff.
3.3 FAULTY INFORMATION. COMPANY shall reimburse AEC for all shipping
and other costs incurred with respect to the processing of an order if
COMPANY caused information, other than the correct order information (as
provided by a customer), to be provided to AEC.
3.4 MINIMUM SALES. COMPANY guarantees that Customers shall purchase
a minimum of *** in net purchases per month during the Term beginning with
the first calendar month commencing after the ninetieth day (i.e., start-up
period) of the Term. The failure of Customers in any month, beginning with
such first month, to make such monthly minimum purchase may be deemed (at
AEC's option) a material failure by COMPANY to perform its obligations
thereunder.
3.5 PAYMENT, REPORTS AND AUDITS.
3.5.1 COMPANY shall provide AEC, within thirty (30) days
after each calendar month, a summary sales report detailing COMPANY's Net
Sales of products pursuant hereto during each calendar month, which report
shall be a basis, inter alia, for the calculation of COMPANY's average
monthly sales (and the Database fees based thereon).
3.5.2 AEC , shall have the right to inspect the book and
records of COMPANY wherever the same may be, insofar as said books and
records pertain to the royalties payable to AEC hereunder. Such examination
shall take place during normal business hours, at COMPANY's place of
business, upon reasonable notice to COMPANY, at AEC's sole cost and expense,
and not more than once per calendar year. Any such inspection must be
undertaken within two years after the end of the calendar yea being inspected.
4. CONFIDENTIALITY AND PROPRIETARY RIGHTS.
4.1 During and following the term hereof, each party to this
Agreement expressly undertakes to retain in confidence, and to require and
cause its subsidiaries and affiliates and its and their respective employees,
contractors and agents to retain in confidence, all information and know-how
transmitted to such party (the Receiving Party) (i) which the disclosing
party hereunder (the Disclosing party) has identified in writing as being
proprietary and/or confidential or (ii) which the Receiving party reasonably
should know, based upon the nature of the information being disclosed, ought
to be treated as confidential (collectively "Confidential Information"). The
Receiving Party will make no use of such Confidential Information except as
expressly authorized under this Agreement. Either party may, however,
disclose Confidential
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Information if required by law, provided such Party shall give the other
reasonable notice prior to such disclosure and shall comply with any
applicable protective order or equivalent. Under no circumstances shall a
Disclosing Party be entitled to terminate this Agreement for an alleged
unauthorized use or disclosure by the Receiving party of Confidential
information which was not marked as "confidential" or "proprietary" unless
such disclosure was made in bad faith (in which case the Disclosing Party may
terminate this Agreement to the extent permitted under Section 7 herein).
4.2 Without limiting the generality of Section 4.1, the parties
agree that the following information disclosed by one party to the other
shall be deemed Confidential information: the capabilities, technical
descriptions and source code relating to either party's released or
unreleased software or hardware products or services; the marketing or
promotion plans of any product or service of either party; either party's
business policies or practices; and information received from others that
either party is obligated to treat as confidential.
4.3 Without limiting the foregoing, COMPANY agrees that the
DATABASES and all information contained therein and/or provided by AEC
hereunder, including but not limited to database layouts, schema, algorithms
and linking and other program features, are and shall be treated as the
Confidential Information. COMPANY agrees not to copy, disclose or otherwise
make available the DATABASES, an nay form, to any person or any purpose other
than as necessary to permit COMPANY's use of the DATABASES as authorized
herein. Any copies or reproductions of the Confidential Information shall
bear the "AMG" logo and any other patent, copyright, trademark or proprietary
notices contained in the original or as reasonably required by AEC. COMPANY
also agrees not to use such Confidential information except as authorized
under this Agreement, and, in particular, without limited the foregoing,
shall not use such information to develop a product that would be competitive
with the DATABASES. AEC agrees that all information related to COMPANY's
customers, including any derivative information, is the exclusive property of
COMPANY.
4.4 Both parties acknowledge that unauthorized disclosure or use of
Confidential Information could cause irreparable harm and significant injury
which may be difficult to ascertain. Accordingly,, both parties agree that
the aggrieved party will have the right to seek and obtain injunctive relief
from breaches of this Section 4, in addition to any other rights and remedies
it may have. Both parties agree that each has and shall retain ownership
rights to its own Confidential Information, and that upon expiration of
termination of this Agreement each party shall return and shall not retain
the Confidential Information of the other party.
4.5 Notwithstanding anything in this Section 4 to the contrary,
Confidential Information shall not be construed to mean any information which
the Receiving Party can show: (i) is, or subsequently becomes, publicly
available other than as a result of the Receiving Party's breach of any
obligation owed to the Disclosing Party or a third party; (ii) became known
to the Receiving Party prior to the Disclosing Party's disclosure of such
information to the Receiving Party, (iii) became known to the Receiving Party
from a source other than the Disclosing Party other than as a result of such
source's breach of an obligation of confidentiality owed to the Disclosing
Party, (iv) is independently developed by the Receiving Party, or (v) has
been authorized for disclosure by the Disclosing Party.
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4.6 The provisions of this Section 4 shall survive termination or
expiration of this Agreement.
5. WARRANTIES AND REPRESENTATIONS.
5.1 BY AEC.
5.1.1 GENERALLY. AEC warrants and represents for the
benefit of COMPANY as follows: (i) the AEC Services will be rendered in
accordance with all requirements identified in this Agreement, (ii) AEC has
all rights, licenses and authorizations required to enter into and perform
this Agreement, and the performance by AEC of its obligations pursuant to
this Agreement will not violate any United States federal, state or municipal
laws, rules, regulations or ordinances or the provisions of any agreement to
which AEC is a party or by which AEC is bound; and (iii) any reports to be
delivered to COMPANY hereunder will be complete and accurate to the best of
AEC's knowledge.
5.1.2 DATABASES. AEC represents and warrants that AEC (and
its affiliates) is the rightful owner and/or licensor of the DATABASES,
including the copyrights, trademarks, trade names or other property rights
contained herein and being licensed herein by AEC. AEC does not warrant that
it owns any rights to the digitized or electronic images (e.g., album cover
graphics, portraits, etc.) necessary to allow licensee to use such
information for any application. It shall be COMPANY's sole responsibility to
identify and solicit any necessary approvals. COMPANY agrees to and does
hereby indemnify AEC and MATRIX against and hold harmless from and against
any and all claims, costs, damages, actions, suites and/or demands ("Claims")
imposed upon or brought against COMPANY by virtue of COMPANY's use of the
images. COMPANY shall defend AEC and MATRIX against any such Claims at
COMPANY's cost and expense with counsel reasonably acceptable to AEC and
MATRIX. AEC and MATRIX shall not be liable for any indirect, special,
incidental, exemplary, consequential or other loss or damages arising out of
or caused by the licensing, delivery, installation or operation of the
images. The foregoing notwithstanding, AEC does not warrant that it owns any
right to the album artwork or artist images or likenesses that have been
electronically scanned and linked to the DATABASE.
5.2 BY COMPANY. COMPANY warrants and represents for the benefit of
AEC as follows: (i) COMPANY Responsibilities and promises herein will be
rendered in accordance with all requirements identified in this Agreement;
(ii) COMPANY has all rights, licenses and authorizations required to enter
into and perform this Agreement, and the performance by COMPANY of its
obligations pursuant to this Agreement will not violate any United States
federal, state or municipal laws, rules, regulations or ordinances or the
provisions of any agreement to which COMPANY is a party or by which COMPANY
is bound; (iii) all orders for Products conveyed to AEC shall be accurately
conveyed to AEC including, as to each order, all information in the form
provided by any Customer; and (iv) COMPANY has the all necessary rights to
sell Products to Customers. Without limiting any of the terms of this
Agreement, COMPANY expressly agrees that it will not, during the terms of
this Agreement, or at any time
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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR CERTAIN PORTIONS OF THIS EXHIBIT
WHEREBY THE TEXT TO BE KEPT CONFIDENTIAL IS MARKED BY EITHER *** OR ***
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR THIS INFORMATION ***
thereafter, use the DATABASES or any of its fields (records) to create,
enhance or build on Other Databases or any similar databases, either for
COMPANY's own use or for the use of any third party.
5.3 SURVIVAL. The representations and warranties contained in this
Section 5 are continuous in nature and shall be deemed first given upon the
execution of the Agreement and shall survive termination or expiration of
this Agreement.
6. INDEMNIFICATION.
6.1 BY AEC. AEC shall indemnify, hold harmless and defend COMPANY
and all of COMPANY's employees, officers, directors and agents from and
against any and all claims, damages, losses, liabilities, suits, actions,
demands, proceedings (whether legal or administrative) and expenses
(including but not limited to reasonable attorneys' fees incurred, with or
without suit, in arbitration or mediation, on appeal or in a bankruptcy or
similar proceeding) (collectively, "Claims") threatened, asserted or filed by
a third party against any of the aforesaid persons or entities to the extent
that such third party Claims arise out of or relate to(i) the breach of any
material warranty, representation or agreement made by AEC in this Agreement;
or (ii) any grossly negligent or tortuous act, willful misconduct or willful
omission by AEC; provided, however, the foregoing indemnity obligation shall
be binding if, and only to the extent that, the Claim at issue does not arise
out of or relate to a matter in respect of which AEC is entitled to
indemnification under Section 6.2 below and provided, further that AEC shall
not be liable for any errors, omissions or inaccuracies in the DATABASES, or
the updates thereof unless caused by AEC's gross negligence or willful
neglect. Furthermore, AEC shall not be liable for any delays or interruptions
in the delivery, transmission or distribution of the DATABASES or the updates
by reason of unavoidable equipment failure, communication circuit failure,
power failure, Acts of God, government intervention, fire, flood, or other
Acts beyond AEC's reasonable control. Any COMPANY modification of the
DATABASES or any failure by COMPANY to implement any enhancements,
improvements, or updates to the DATABASES as supplied by AEC shall void the
indemnity under Section 6.1 of this Agreement.
6.2 BY COMPANY. COMPANY shall indemnify, hold harmless and defend
AEC and all employees, officers, directors and agents of AEC from and against
any and all Claims threatened, asserted or filed by a third party against any
of the aforesaid persons or entities to the extent that such third party
Claims arise out of or relate to: (i) the breach of any material warranty,
representation or agreement made by COMPANY in this Agreement; or (ii) any
grossly negligent or tortuous act, willful misconduct or willful omission by
COMPANY. The foregoing indemnity obligation shall be binding if, and only to
the extent that, the Claim at issue does not arise out of or relate to a
matter in respect of which COMPANY is entitled to indemnification under
Section 6.1 above.
6.3 MANNER OF EXERCISE. Any person or entity that is entitled to be
indemnified pursuant to this Section 6 ("Indemnified Party") must give prompt
notice to the indemnifying party (the "Indemnifying Party") in writing of the
occurrence of the Claim for which indemnity is requested and, at the option
of the Indemnifying Party, the Indemnifying Party may assume the
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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR CERTAIN PORTIONS OF THIS EXHIBIT
WHEREBY THE TEXT TO BE KEPT CONFIDENTIAL IS MARKED BY EITHER *** OR ***
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR THIS INFORMATION ***
handling, settlement and defense of such Claim, in which event the
Indemnified Party will cooperate in all reasonable respects with the
Indemnifying Part at the Indemnifying Party's expense. The Indemnifying Party
shall reimburse the Indemnified Party on demand for any payment made by the
Indemnified Party in respect of any Claim to which the foregoing indemnity
relates which either (i) has resulted in an adverse judgment against the
Indemnified Party or (ii) has been settled with the written consent of the
Indemnifying Party, which it may withhold for any reason.
7. DEFAULT AND EARLY TERMINATION.
7.1 DEFAULT. In the event of a default (a "Default"), the
non-defaulting party shall have the right to terminate this Agreement by
giving notice to the other party under this Agreement and of its election to
terminate this Agreement, after the non-defaulting party becomes aware of
such Default, Each of the following is a Default:
(i) The failure of either party to materially perform any of such
party's obligations contained in this Agreement, which failure has not been
cured within ten (10) days, in the case of a breach in any payment obligation
hereunder, or thirty (30) days, in the case of a breach in any other kind of
obligation hereunder, after the non-breaching party provides notice to the
breaching party describing the breach(es) in reasonable detail. The failure
of AEC to meet any of its Performance Standards contained in Section 2.2.2
above (which Performance Standard has been measured and averaged over a
calendar month) shall not be deemed material unless AEC shall fail to meet
such Performance Standard by a margin greater than fifteen percentage points
(15%) in any month.
(ii) Notwithstanding anything to the contrary in Section 7.1(i), the
failure of AEC to meet any of its Performance Standards (which Performance
Standard has been measured and averaged over a calendar month) shall not be
deemed material during any "Surge Month" (as hereinafter defined), except as
provided in this Section 7.1(ii). A "Surge Month" shall be deemed to have
occurred when the average daily order volume for any calendar month (measured
by the number of discrete orders placed, not the total number of Products
ordered) (the "Average Daily Order Volume") exceeds the average of the
previous two (2) calendar months Average Daily Order Volume by at least
twenty-five percent (25%). If in any Surge Month AEC shall fail to meet any
of its Performance Standards by a margin greater than twenty percentage
points (20%), then AEC shall be in Default.
(iii) The occurrence of any of the following: (a) any party admits
in writing its inability to pay its debts generally or makes a general
assignment for the benefit of creditors; (b) any affirmative act of
insolvency by any party filing by any party of any petition or action under
any bankruptcy, reorganization, insolvency, arrangement, liquidation,
dissolution or moratorium law, or any other similar law or laws for the
benefit of, or relating to, debtors; (c) the filing, by any third party,
against any party of any petition or action of the type described in clause
(b) above, which has not been either controverted by such party within
fifteen (15) days after its receipt of the service of process dating to such
filing, or stayed or dismissed within thirty (30) days after the time of such
receipt; (d) the subjection of a material part of any party's property to
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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR CERTAIN PORTIONS OF THIS EXHIBIT
WHEREBY THE TEXT TO BE KEPT CONFIDENTIAL IS MARKED BY EITHER *** OR ***
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR THIS INFORMATION ***
any levy, seizure, assignment or sale for or by any creditor, third party or
governmental agency, provided that such levy, seizure, assignment or sale has
not been stayed, discharged or reversed within thirty (30) days after the
date of issuance of the order or decree which authorized the same; or (e) the
issuance of any injunction enjoining either party from performing any of its
material obligations hereunder, which injunction has not been stayed,
discharged or reversed within thirty (30) days after the date of issuance of
the order or decree which authorized the same.
7.2 EFFECT OF DEFAULT. If there is a Default, the parties have all
rights and remedies provided in this Agreement in addition to those rights
and remedies it may have under law or equity, subject to Section 8 hereof.
8. LIMITATION OF LIABILITY.
NEITHER OF THE PARTIES HERETO SHALL HAVE ANY LIABILITY TO THE OTHER PARTY
HERETO OR TO ANY THIRD PARTY FOR ANY INDIRECT, SPECIAL, CONSEQUENTIAL,
EXEMPLARY OR INCIDENTAL DAMAGES ARISING UNDER THE TERMS OF THIS AGREEMENT,
EVEN IF ADVISED IN ADVANCE OF THE POSSIBILITY OF SUCH DAMAGES. The foregoing
shall not be interpreted to limit any party's right to be fully indemnified
to the extent provided under Section 6 for damages claimed by a third party.
COMPANY acknowledges that nothing in this Agreement shall be deemed to
establish a contractual or other legally recognizable relationship between
AEC and a Customer, it being agreed that the services provided hereunder are
for COMPANY's benefit and as agent for COMPANY. COMPANY shall be responsible
for ensuring compliance with all laws and regulations governing the sale and
distribution of Product as described herein.
9. FORCE MAJEURE.
Except for obligations under Section 4 (Confidentiality) and obligations of
payment, the executory obligations of the parties hereunder shall be excused
to the extent, but only to the extent, delayed or prevented by Acts of God,
including, without limitation, earthquake, storm, flood, fire, explosion,
power failure, civil insurrection, or any other cause beyond the reasonable
control of the affected party hereto and which such party could not by
reasonable diligence have avoided (collectively, "Force Majeure"), provided
that written notice of such Force Majeure is given by the affected party to
the other within twenty (20) days of such party's becoming affected by the
Force Majeure. Furthermore, in the event such notice is timely given, no
failure or delay by either party in the performance of any of its obligations
(other than Confidentiality obligations) as a result of a Force Majeure shall
give rise to any liability to the other party for any loss, injury, delay, or
other casualty suffered or incurred by such other party due to such Force
Majeure. The party directly affected by a Force Majeure shall use all
reasonable efforts to minimize the effects of the same. At the election of
the party not directly affected by a Force Majeure, a period of time equal to
the duration of any suspension of performance by the other party as a Force
Majeure shall be added to the end of the then current term of this Agreement,
and such term shall be accordingly extended.
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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR CERTAIN PORTIONS OF THIS EXHIBIT
WHEREBY THE TEXT TO BE KEPT CONFIDENTIAL IS MARKED BY EITHER *** OR ***
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR THIS INFORMATION ***
10. TRADEMARKS/COPYRIGHT NOTICE.
10.1 All presentation of AEC's DATABASE information (e.g., page
view, biography, album review, etc.) within the Store during the Term hereof
in connection with the carrying out of this Agreement, COMPANY agrees that
AEC shall be entitled to include one of its All-Music Guide trademarks and/or
service marks with an associated design or logo (individually and
collectively, the "AEC Marks") which shall be mutually agreed to by both
parties, but subject to COMPANY's prior written approval, which Xxxx shall
not be unreasonably withheld or delayed. Without limiting the foregoing,
COMPANY agrees that the common goal with respect to AEC's Marks displayed on
COMPANY's Store and on its web site, is to inform the viewer that the data
viewed has been provided by All-Music Guide. The following DATABASE
information will be marked with the following AMG logo and branding: Artist
Biographies, Essays, and Album Reviews will be marked "AMG Biography" and
"AMG Review," and "AMG Essay". After each biography and album review, the
name of the author, and the term "AMG" will be listed. Ratings will be marked
"AMG Ratings", relational elements such as the following will be marked as:
"AMG Roots & Influences", "AMG Similar/Related Artists", "AMG Music Maps",
and "AMG Similar Albums". The acceptable forms of markings for the DATABASE
information, as well as the copyright notices that must appear with the
presentation of the DATABASE information, are set forth on Exhibit II -
Trademark Specifications and Copyright Notices.
During the term of the Agreement, COMPANY grants AEC a limited license to use
the Company Marks in promotional materials, provided that both parties have
mutually approved of such materials in writing, which approval shall not be
unreasonably withheld or delayed. Nothing contained in this Agreement shall
be construed as an assignment or grant to AEC of any right, title or interest
in or to Company Marks other than such promotional use, and in the carrying
out of AEC obligations hereunder. All rights relating to the Company Marks
are expressly being reserved by COMPANY, except for the limited license
granted above to AEC, and all good will associated with Company Marks inures
to the benefit of COMPANY.
10.2 The COMPANY acknowledges that AEC is the sole owner of all
right, title and interest in the AEC Marks but not the COMPANY Marks. Nothing
contained in this Agreement shall be construed as an assignment or grant to
COMPANY of any right, title or interest in or to the AEC Marks. All rights
relating thereto are expressly being reserved by AEC, except for the limited
licenses granted to COMPANY above, and all good will associated with the AEC
Marks inures to the benefit of AEC.
10.3 For the avoidance of doubt, nothing contained in the foregoing
provisions of this Section 10 shall be construed to supersede the
requirements that AEC reproduce and display such logos and any copyright
notices as relate to the DATABASES. During the term of the Agreement, parties
agree that the MATRIX and/or AMG logos shall appear prominently in all
promotional materials prepared by either party, whether or not the AEC Marks
or the Company Marks appear.
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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR CERTAIN PORTIONS OF THIS EXHIBIT
WHEREBY THE TEXT TO BE KEPT CONFIDENTIAL IS MARKED BY EITHER *** OR ***
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR THIS INFORMATION ***
11. GENERAL.
11.1 Each party acknowledges that it has read this Agreement,
understands it, and agrees to be bound by its terms. This Agreement
represents the entire understanding of the parties with respect to the
subject matter hereof and supersedes all prior agreements, negotiations,
understandings, representations, statements and writings among the parties
relating thereto with regard to the subject matter hereof. No modification,
alteration, waiver or change in any of the terms of this Agreement shall be
valid or binding upon the parties hereto unless made in writing and duly
executed by both of the parties hereto.
11.2 This Agreement shall be governed by and interpreted in
accordance with the laws of the State of Florida and the United States of
America, without regard to the principles of conflicts of law. The parties
hereby consent to and submit to the sole jurisdiction of a competent court
located in the State of Florida. Such court shall be the sole and exclusive
venue for resolution of any disputes or disagreements between the parties
relating to this Agreement or the transactions contemplated hereby or
otherwise arising hereunder or with respect to any breach of the terms and
provisions hereof.
11.3 Should any part of this Agreement be held unenforceable or in
conflict with the applicable laws or regulations of any jurisdiction, the
invalid or unenforceable part or provision shall be replaced with a provision
which accomplishes, to the extent possible, the original business purpose of
such part or provision in a valid and enforceable manner, and the remainder
of this Agreement shall remain binding upon the parties.
11.4 Each of the parties hereby covenants and represents to the
other that neither the execution and delivery of this Agreement nor the
performance of the transactions contemplated hereby will cause a breach
under, or violate provisions of, any other agreement to which it is a party
or by which its assets are or may be bound. This Agreement and all
obligations and rights herein shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and assigns.
11.5 This Agreement is not intended to create any relationship other
than AEC as an independent contractor performing services covered by this
Agreement, and COMPANY as the party contacting with AEC for those services.
No party is a partner or a legal representative of the other for any purpose
whatsoever. No party is authorized to make any contract, agreement or
warranty on behalf of any other party. Under no circumstance shall one
party's employees be construed to be employees of any other party.
11.6 All notices given to the parties hereunder and all statements
and payments hereunder shall be addressed to the parties at the address set
forth below or at such other address as shall be designated by the parties in
writing from time to time:
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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR CERTAIN PORTIONS OF THIS EXHIBIT
WHEREBY THE TEXT TO BE KEPT CONFIDENTIAL IS MARKED BY EITHER *** OR ***
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR THIS INFORMATION ***
If to COMPANY:
To Name and Address
Indicated on Cover Page hereto
If to AEC: with a copy to:
AEC One Stop Group, Inc. Alliance Entertainment Corp.
0000 Xxxxx Xxxxx Xxxxx 0000 Xxxxx Xxxxx Xxxxx
Xxxxx Xxxxxxx, Xxxxxxx 00000 Xxxxx Xxxxxxx, Xxxxxxx 00000
Attn: Xxxx Xxxxxxx Attn: General Counsel
All notices shall be in writing and shall be personally delivered, or served
by certified mail, return receipt requested, or by overnight mail service
such as Federal Express, all charges pre-paid. Except as otherwise provided
herein, such notices shall be deemed given three days after mailing or
delivery to an overnight mail service, all charges prepaid, except that
notices of change of address shall be effective only after actual receipt
thereof. The failure of the recipient to accept or receive notice given by
certified mail, return receipt requested, postage pre-paid, does not affect
the validity of the notice.
11.7 The terms and provisions of this Agreement that by their sense
and context are intended to survive the performance of such term or provision
or of this Agreement shall so survive the completion of performance and
termination of this Agreement, including without limitation the provisions of
Sections 4, 5 and 6 hereof.
11.8 Waiver by either party of a default or breach or a succession
of defaults or breaches, or any failure by either party to enforce any rights
hereunder, shall not be deemed to constitute a waiver of any subsequent
default or breach with respect to the same or any other provision hereof, and
shall not deprive such party of any right to terminate this Agreement arising
by reason of any subsequent default or breach.
11.9 The captions used in this Agreement are for convenience of
reference only and are not to affect the construction hereof or be taken into
consideration in the interpretation hereof.
11.10 This Agreement may be executed in one or more counterparts
each of which shall be deemed an original but all of which taken together
shall be deemed one and the same instrument.
End of General Terms & Conditions
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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR CERTAIN PORTIONS OF THIS EXHIBIT
WHEREBY THE TEXT TO BE KEPT CONFIDENTIAL IS MARKED BY EITHER *** OR ***
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR THIS INFORMATION ***
EXHIBIT 1
Fulfillment Prices
AEC ONE STOP GROUP
ONE STOP MAJOR LABEL AND MAJOR INDEPENDENT PRICE LIST
*** CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR THIS INFORMATION ***
II. VIDEO:
(Pricing to be given to Company, upon request.)
N.B. If products are not on lists above, and not in AEC's regular inventory
holdings, pricing shall be based on cost to AEC and xxxx-up consistent with
creation of above price list, and general market pricing.
III. VOLUME DISCOUNTS:
The following discounts shall apply to sales within the indicated
ranges:
*** CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR THIS INFORMATION ***
For example, for annual sales of ***, the discount shall apply as
follows: the first *** in sales shall not be discounted. A discount of *** shall
apply to the next *** in sales. The remaining *** in sales shall be discounted
by ***.
The discount shall be calculated by AEC within 90 days after each year
during the term hereof. The discount shall be applied as a credit against
COMPANY's purchases in the ensuing year.
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