E-Business Solution Service Agreement - Pandesic LLC and ARTISTdirect LLC
PANDESIC AGREEMENT
ORDER FORM
CONTRACT DATE: April 15, 1999 CONTRACT NUMBER:
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MERCHANT INFORMATION
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COMPANY NAME: ARTISTdirect, LLC CONTACT NAME: PASCAL DESMARETS
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BILLING ADDRESS: 17835 VENTURA BLVD. PHONE: 818-758-8700
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SUITE 310 FAX: 818-758-8722
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ENCINO, CA 91316 E-MAIL: PASCAL.DESMARETS@ARTISTDIRECT.COM
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BILLING CONTACT: BOB MORSE TECHNICAL CONTACT: MORGAN PORTER
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PHONE: 818-758-8700 PHONE: 818-758-8700
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FAX: 818-758-8722 FAX: 818-758-8722
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E-MAIL: BOB.MORSE@ARTISTDIRECT.COM E-MAIL: MORGAN.PORTER@ARTISTDIRECT.COM
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Merchant hereby orders the Pandesic E-Business Solution Service from PANDESIC
LLC ("PANDESIC"). This Order Form and Exhibit A to this Order Form Additional
Services is subject to the Terms and Conditions and the Pandesic reference
documents referred to herein (collectively, the "Agreement"). This Agreement is
valid when accepted by an authorized representative of PANDESIC.
The Pandesic E-Business Solution Service consists of (i) the installation,
implementation, hosting and administration of Merchant's e-commerce web site
(the "Hosting Services") on computers and system software (the "Pandesic
Equipment") operated by PANDESIC or its hosting partner (the "Hosting Partner"),
and (ii) licenses of associated Pandesic and third party ("Supplier")
application software (the "Software") for such purposes.
Other services provided hereunder include (i) training on the operation of the
Pandesic E-Business Solution Service, and (ii) maintenance and support services
(the "Maintenance Services"), all as described from time to time in PANDESIC
reference documents. The Pandesic E-Business Solution Service and the other
services are referred to collectively as the "Services."
MERCHANT HAS READ AND AGREES TO BE BOUND BY THE TERMS AND CONDITIONS OF THIS
AGREEMENT. MERCHANT AND PANDESIC AGREE THAT THE TERMS AND CONDITIONS OF THIS
AGREEMENT REPLACE AND SUPERSEDE ALL PROPOSALS, WRITTEN OR ORAL, AS WELL AS OTHER
COMMUNICATIONS BETWEEN MERCHANT AND PANDESIC RELATING TO THIS AGREEMENT.
ACCEPTANCE
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ACCEPTED BY MERCHANT: ACCEPTED BY PANDESIC LLC:
SIGNATURE: /s/ Marc P. Geiger SIGNATURE: /s/ Peter Wolcott
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PRINT NAME: Marc P. Geiger PRINT NAME: Peter Wolcott
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TITLE: CHIEF EXECUTIVE OFFICER TITLE: President
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DATE: April 15, 1999 DATE: 5/2/99
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PANDESIC AGREEMENT
RATE SHEET
INITIAL SET-UP CHARGE
- Merchant shall pay an initial set-up charge of [***], payable within
[***] days of acceptance of this Agreement.
MONTHLY TRANSACTION FEES
- The Monthly Base Fee shall be [***].
- Monthly Transaction Fees will be calculated using the Monthly Base
Fee plus a percentage of monthly revenue (defined as [***] generated
by the sale or other distribution of products
- Monthly Transaction Fees commence upon the Technical Installation
(the date that the Pandesic software is loaded on the servers and the
servers are ready to accept Merchant's configuration and functional
installation of its products), at the site of Pandesic's Hosting
Partner ("Digex").
FEE SCHEDULE
Monthly Transaction Fee shall be determined in accordance with the following
table:
MERCHANT MONTHLY SALES MONTHLY TRANSACTION FEE
From To Base Fee Incremental Transaction %
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[***] [***] [***] [***]
[***] [***] [***] [***]
For example, a merchant that transacts [***] of monthly gross sales and [***] of
freight revenue would be responsible for a Monthly Transaction Fee of [***].
Monthly Base Fee for [***] in Monthly Sales [***]
[***] [***]
Total owed to Pandesic [***]
--------------------------
[***] Confidential treatment has been requested for the bracketed portion. The
confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
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Pandesic Agreement
Rate Sheet
ACCEPTANCE
ACCEPTED BY MERCHANT: ACCEPTED BY PANDESIC LLC:
SIGNATURE: /s/ Marc P. Geiger SIGNATURE: /s/ Peter Wolcott
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PRINT NAME: Marc P. Geiger PRINT NAME: Peter Wolcott
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TITLE: CHIEF EXECUTIVE OFFICER TITLE: President
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DATE: April 15, 1999 DATE: 5/2/99
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PANDESIC AGREEMENT
TERMS AND CONDITIONS
The following terms and conditions (these "Terms") govern the provisions by
Pandesic LLC ("Pandesic") of the Services described on the Pandesic E-Business
Solution Service Order Form ("Order Form") to the company ("Merchant")
identified on the Order Form.
1. OBLIGATIONS OF PANDESIC
1.1 Pandesic will provide, deploy, support and maintain the
Pandesic E-Business Solution Service.
1.2 Pandesic hereby grants to Merchant a non-exclusive and
non-assignable license to use the Software in the United
States for the purpose of conducting business over the
Internet throughout the world.
2. OBLIGATIONS OF MERCHANT
2.1 Merchant shall comply with all of the terms of this Agreement,
including but not limited to, the Acceptable Use Policy (the
"Use Policy"), as the Use Policy may be modified from time to
time during the term of this Agreement
2.2 Merchant may use the Services for the purpose of conducting
electronic commerce activities, as well as processing third
party data, solely in connection with products and services
offered via Merchant's website. Subject to the foregoing
Merchant shall not offer, for a fee or free of charge,
services consisting of the processing of data through the use
of the Services for, or for the benefit of, any person other
than Merchant.
3. PAYMENT
3.1 Merchant shall pay the fees set out in the Rate Sheet,
attached hereto.
3.2 All payments shall be made in U.S. Dollars. In all cases,
payments are due upon receipt by Merchant of the applicable
monthly invoices.
3.3 Payments and any additional charges, including, but not
limited to, any early cancellation charges, accrued interest
and late fees shall be invoiced in arrears and shall appear on
the monthly invoices for Services or separate invoices, as
determined by Pandesic in its sole discretion.
3.4 In addition to any other remedies that may be available to
Pandesic under this Agreement (including, but not limited to,
those in connection with the termination of this Agreement
pursuant to Section 13 below) or applicable law, invoices that
are not paid in full thirty (30) days after receipt by
Merchant (a "Payment Default") will be subject to interest
charges of the lesser of one and one-half percent (1.5%) per
month or portion thereof and the highest amount permitted by
law, which interest shall accrue daily.
3.5 Subject to Section 13.3 of this Agreement, Merchant shall be
liable for all amounts owed to Pandesic pursuant to this
Agreement, irrespective of the termination of this Agreement
Merchant also shall pay to Pandesic all expenses incurred by
Pandesic in exercising any of its rights under this Agreement
or applicable law with respect to the collection of a Payment
Default, including, but not limited to, reasonable attorneys'
fees and the fees of any collection agency retained by
Pandesic.
3.6 Merchant shall be liable for, and shall reimburse Pandesic and
indemnify and hold Pandesic harmless from all local, state,
federal and non-United States taxes or similar assessments or
charges (including any interest and penalties imposed
thereon), other than taxes based on the net income of
Pandesic, arising out of or relating to this Agreement or the
provision of the Services hereunder.
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PANDESIC AGREEMENT
TERMS AND CONDITIONS
4. MAINTENANCE
4.1 Pandesic designates time periods ("Scheduled Maintenance
Windows") during which it may limit or suspend the
availability of the Pandesic Equipment and/or Software
involved in providing its Services (an "Outage") to perform
necessary maintenance or updates. Scheduled Maintenance
Windows currently are each Tuesday and Friday between the
hours of 4:00 a.m. and 8:00 a.m. and the third Saturday of
each month between the hours of 4:00 a.m. and 12 noon Pacific
Standard Time.
4.2 If planned maintenance has the possibility of making the
Pandesic Equipment used by Merchant inaccessible to the
Internet during a Scheduled Maintenance Window, Pandesic will
provide not less than twenty-four (24) hours prior electronic
mail or other notice to Merchant of the Scheduled Maintenance
Window during which the Outage is planned.
4.3 In addition, Pandesic reserves the right to perform any
required maintenance work or updates outside of the Scheduled
Maintenance Window with a minimum of seven (7) days prior
notice to Merchant. Pandesic also may perform at any time any
maintenance or updates it believes is necessary to preserve
the integrity of Pandesic's network and services offered
regardless of whether it has provided any notice to Merchant
thereof. Pandesic shall perform any upgrades to the Software
at times mutually acceptable to both parties.
4.4 Merchant agrees that Pandesic, its Hosting Partner and its
third party service providers shall have access to its
internet commerce system and web site for the purposes
contemplated in this Agreement.
5. CONFIDENTIALITY
5.1 In the course of business dealing, both parties will be
releasing valuable trade secrets and other confidential
information to the other including, in Pandesic's case,
information about the Services and Software provided by
Pandesic, Hosting Partner and Suppliers, and in Merchant's
case, its customer business data. Each party recognizes that
such information constitutes valuable trade secrets of the
other.
5.2 Accordingly, each party agrees that (i) the provisions of this
Agreement (ii) any information whatsoever with respect to the
Services and the Software, (iii) the course of dealing between
Pandesic and Merchant hereunder, (iv) Merchant's data, and (v)
all other non-public information (whether technical or
otherwise) made available or disclosed to such party (the
"recipient") by the other (the "disclosing party")
(collectively, the "Confidential Information") shall be
treated by recipient on a confidential basis and shall not be
reproduced, reduced to writing, or disclosed to any employee
or contractor except as necessary to provide or use the
Services, or to any other person or entity without the prior
written consent of disclosing party.
5.3 Upon termination of this Agreement, any documentation
reflecting any Confidential Information of the other party
shall be returned promptly to such party. Disclosure of
information pursuant to applicable statutes or regulations
(collectively, 'Laws') shall be excepted from the provisions
of this Section 5; provided, however, that prior to any
disclosure by the recipient pursuant to any Laws, recipient
will assert the confidential nature of the Confidential
Information and will cooperate fully with the disclosing
party, at the disclosing party's expense, in protecting
against any such disclosure including, but not limited to,
obtaining a protective order or similar order narrowing the
scope of such disclosure of the Confidential Information. In
the event such protection is not obtained, the recipient shall
disclose the Confidential Information only to the extent
necessary to comply with the Laws.
6. PROPRIETARY RIGHTS INDEMNIFICATION
6.1 Merchant agrees to indemnify and hold harmless Pandesic, all
individuals or entities controlling, controlled by or under
common control with Pandesic (each, a "Pandesic Affiliate"),
Hosting Partner, and the officers, directors and employees of
Pandesic, Pandesic Affiliates and Hosting Partner (an
"Indemnified Party") against any losses, claims, damages,
liabilities, penalties, actions,
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PANDESIC AGREEMENT
TERMS AND CONDITIONS
proceedings or judgments (collectively "Losses") to which an
Indemnified Party may become subject related to or arising out
of any infringement or misappropriation or alleged
infringement or misappropriation of any United States
copyright, trade secret or other proprietary right related to
any hardware or software (other than the Pandesic Equipment
and the Software) utilized by Merchant in connection with any
of the Services or to any Merchant data distributed via the
Pandesic E-Business Solution Service and will reimburse such
Indemnified Party for all legal and other direct expenses,
including reasonable attorneys' fees incurred by such
Indemnified Party in connection with investigating, defending
or settling any Loss, whether or not in connection with
pending or threatened litigation in which such Indemnified
Party is a party.
6.2 Pandesic agrees to indemnify and hold harmless Merchant
against any Losses to which Merchant may become subject,
related to or arising out of any infringement or
misappropriation or alleged infringement or misappropriation
of any United States patent, copyright, trade secret or other
proprietary right related to the Pandesic Equipment or the
Software and will reimburse Merchant for all legal and other
direct expenses, including reasonable attorneys' fees incurred
by Merchant in connection with investigating, defending or
settling any Loss, whether or not in connection with pending
or threatened litigation in which Merchant is a party. This
indemnification does not relate to the Merchant data or
matters that arise from Merchant data or conduct. The
provisions of this Agreement relating to indemnification shall
survive termination of this Agreement.
6.3 In the event of any claim of infringement or misappropriation
under paragraph 6.2 above, Pandesic shall use its best
efforts, at its option and expense to either (i) procure for
Merchant the right to continue using the Pandesic Equipment or
the Software, (ii) replace such Pandesic Equipment or Software
with non-infringing equipment or software, or (iii) modify the
same so as to make it non-infringing, and thereafter, (iv)
terminate the Agreement as to the infringing Pandesic
Equipment or Software and refund to Merchant any of the unused
portion of the fees paid for Services prior to such
termination.
7. INDEMNIFICATION
7.1 In addition to other indemnification provided herein,
including without limitation Indemnification provided in
Section 8.3 of this Agreement from the date of any such breach
of warranty, notwithstanding any cure period, and except as to
matters covered by paragraph 6.2 above, Merchant agrees to
indemnify and hold harmless Pandesic, Pandesic Affiliates,
Hosting Partner, and the officers, directors and employees of
Pandesic, Pandesic Affiliates, and Hosting Partner (each an
"Indemnified Party") against any Losses to which an
Indemnified Party may become subject and which Losses arise
out of, or relate to Merchants breach of this Agreement in
connection with Its use of the Services under or related to
this Agreement, and will reimburse an Indemnified Party for
all legal and other expenses, including reasonable attorneys'
fees Incurred by such Indemnified Party in connection with
investigating, defending or settling any Loss whether or not
in connection with pending or threatened litigation in which
such Indemnified Party is a party.
8. OTHER MERCHANT ASSURANCES
8.1 During any time period when Merchant is provided access to any
facilities, hardware or other property owned or leased by, or
otherwise under the control of Pandesic or Hosting Partner
(collectively "Pandesic Property") pursuant to this Agreement
Merchant shall (i)maintain insurance, with Pandesic and
Hosting Partner as a named payee, covering any damage or
destruction to Pandesic Property (collectively "'Damage"); (i)
reimburse Pandesic for all expenses incurred by Pandesic in
replacing or repairing, as the case may be, any Damage caused
by Merchant, other than normal wear and tear on Pandesic
Property.
8.2 Merchant shall not attempt to copy, modify, alter,
disassemble, decompile, translate or convert Into human
readable form, or reverse engineer, all or any part of the
Software and shall not use the Software to develop any
derivative works or any functionally compatible or competitive
software, except to the extent permitted under applicable law.
However, Merchant may create interfaces to the Software or
modify the provided interfaces to permit interfacing with
Merchant's legacy database systems solely for Merchant's use
in connection with the Services provided pursuant to this
Agreement. Merchant shall not. separate the Software into its
component parts, nor
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PANDESIC AGREEMENT
TERMS AND CONDITIONS
incorporate any component files into any product, nor shall it
remove any proprietary, trademark or copyright markings or
confidentiality legends within the Software.
8.3 Merchant shall not use the Services in any manner which
violates any law or regulation, is for a fraudulent purpose,
contravenes public policy, or may cause Pandesic or its
Suppliers to be subject to prosecution or legal action.
Merchant shall only use the Services to process sales
transactions which, to the best of its knowledge, are genuine
and do not arise out of fraudulent or illegal activities in
the sale of goods, information or services. Merchant agrees,
represents and warrants that Merchant's web site shall not
contain any content or materials that infringe on the rights
of any other party or violate any applicable law or regulation
or any proprietary, contract, moral, privacy or other third
party right, or which would expose Pandesic, its Hosting
Partner or its Suppliers to any civil or criminal liability or
otherwise would affect Pandesic's or its Hosting Partner's
business; provided however, that in the event of any such
Infringement, Merchant shall have a period of fifteen (15)
business days from any such infringement to take any steps
required to cure any such breach of the warranty provided
herein with respect to such content or materials. Merchant
shall indemnify and save Pandesic, Pandesic Affiliates,
Hosting Partner, and the officers, directors and employees of
Pandesic harmless (each an "Indemnified Party") against any
claim, liabilities and costs by which an Indemnified Party may
become subject to and which arise out of, or relate to any
content contained on Merchants web site or which result from
the use of the Services in contravention of this section.
Merchant shall (a) acquire all authorizations necessary in
respect of any hyperlinks by its commerce web site, and upon
reasonable request by Pandesic, (b) provide Pandesic and its
Hosting Partner with accurate information concerning
descriptive claims, warranties, guarantees, nature of its
business and the addresses where its business is conducted.
8.4 Merchant appoints Pandesic as its agent to accept customer
relationships with certain of its Suppliers (such as
Cybercash) as more fully described In the reference documents.
9. USE OF MERCHANT'S NAME
9.1 Pandesic shall be permitted to use Merchant's name in a manner
mutually agreed to by the parties and in compliance with any
trademark usage guidelines provided by Merchant to Pandesic,
in connection with proposals to prospective merchants and
otherwise in print and in electronic form for marketing or
other purposes, including, but not limited to, use in
connection with (i) compliance with applicable laws or
regulations; and (ii) the protection of any rights relating to
Pandesic or its business.
10. USE OF PANDESIC'S NAME
10.1 Merchant may use the name "PANDESIC" in connection with the
Services or otherwise only with the prior written consent of
Pandesic. Pandesic shall be permitted to place an image of its
logo on Merchant's web site in order to identify Pandesic as
the e-business solution provider to Merchant. The parties
shall jointly agree the size and location of such logo.
10.2 Except as set forth herein, neither party shall have the right
to use or display the trademarks of the other party (including
with respect to consent of Pandesic, Pandesic's Hosting
Partner and Suppliers) in connection with the Services or
otherwise without prior written consent of the other party.
11. USE OF PANDESIC'S NAME
11.1 Subject to Section 4, Pandesic will use its reasonable
commercial best efforts to assure that the Services will be
available twenty-four (24) hours a day, seven (7) days a week.
If the Services are unavailable for more than a total of 4
hours in any week, other than as a result of the maintenance
activities described in Section 4, Merchant's sole and
exclusive remedy shall be that, in the event the Fees are
below the Monthly Base Fee in the month of availability, the
fees shall be waived on a pro rata basis for the period of
unavailability.
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PANDESIC AGREEMENT
TERMS AND CONDITIONS
11.2 For purposes of this Agreement, a week shall be considered to
run from Sunday to Saturday and the Services shall be deemed
to be unavailable if (i) the system network is incapable of
transmitting data (subject to Section 15 below); or (ii)
Pandesic's standard hardware; software, or operating system is
functioning in a manner that prevents http, ftp, or mail
access to the Internet server or the software is unable to
process standard functions of the Pandesic E-Business Solution
Service ("Unavailability").
11.3 Notwithstanding the foregoing, Pandesic shall not be in breach
of this warranty for any period of unavailability which
results from Merchant' s action or inaction, including, but
not limited to, Merchants use of Merchant owned, non-standard,
or unsupported hardware and/or software installed by the
Merchant (or by Pandesic at the Merchant's request).
11.4 Pandesic warrants that the Maintenance Services will be
performed in accordance with generally accepted industry
standards for comparable services. Merchant's sole and
exclusive remedy for any breach of the foregoing warranty
shall be to provide Pandesic with notice of such nonconformity
within thirty (30) days of the defective performance and
Pandesic shall re-perform such Maintenance Services.
11.5 YEAR 2000 COMPLIANCE
11.5.1 The Pandesic-owned portion of the Software shall be
Year 2000 Compliant as of September 30, 1999.
11.5.2 In this regard, "Year 2000 Compliant" shall mean that
the software shall continue to function before, during
and after January 1, 2000 without error related to, or
the product of, date data which represents or
references different centuries, and, more specifically,
(a) correctly manages and manipulates data involving
dates, including single-century formulae and
multi-century formulae, (b) correctly identifies the
year 2000 as a leap year, (c) does not include any
information other than a specific date, and (d) uses
four digits to indicate the year in storage, use and
communication of all date data date-related functions.
11.5.3 The Software also includes third party Software. In
some cases, the Year 2000 capabilities of such third
party Software are unwarranted by the Suppliers of such
Software. Pandesic shall test the third party Software
for Year 2000 Compliance and shall use its reasonable
commercial best efforts to cause such Software to be
made Year 2000 Compliant by their Suppliers.
11.5.4 Provided that Pandesic takes reasonable steps to test
the third party Software as provided in Section 11.5.3
of this Agreement, Pandesic is not responsible for
errors resulting from third-party systems or devices,
which directly access the database and overwrite the
database date fields or from the improper integration
of non-Year 2000 Compliant systems by Merchant.
11.6 EXCEPT AS SET FORTH HEREIN, PANDESIC, HOSTING PARTNER AND
SUPPLIERS DISCLAIM ALL OTHER WARRANTIES, EXPRESS, IMPLIED OR
STATUTORY, INCLUDING BUT NOT LIMITED TO THE IMPLIED WARRANTIES
OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
11.7 PANDESIC DOES NOT WARRANT THE ACCURACY OF THE TAX DATA AND
OTHER TAX CALCULATIONS MADE BY THE SOFTWARE. MERCHANT BEARS
FULL RESPONSIBILITY FOR THE DETERMINATION OF THE ACCURACY AND
APPLICABILITY OF THE OUTPUT FROM THE SOFTWARE AND ACKNOWLEDGES
AND UNDERSTANDS THAT TAX CALCULATIONS OFTEN INVOLVE
INTERPRETATIONS AND THAT THE DATA OF MANY JURISDICTIONS CAN
CHANGE RAPIDLY. MERCHANT UNDERSTANDS THAT PANDESIC IS
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PANDESIC AGREEMENT
TERMS AND CONDITIONS
NOT PROVIDING SPECIFIC TAX, LEGAL, ACCOUNTING OR OTHER EXPERT ADVICE AND
MERCHANT SHOULD OBTAIN THE ADVICE OF QUALIFIED PROFESSIONALS IN THE AREA.
12. LIMITATION OF LIABILITY
12.1 NEITHER MERCHANT NOR PANDESIC, HOSTING PARTNER AND SUPPLIERS
SHALL BE LIABLE FOR (i) ANY INDIRECT, INCIDENTAL, SPECIAL,
CONSEQUENTIAL OR EXEMPLARY DAMAGES, OR FOR ANY LOSS OF
PROFITS, LOSS OF REVENUE OR BUSINESS INTERRUPTION OR LOSS OF
BUSINESS INFORMATION RESULTING FROM THE SERVICES, THE PANDESIC
EQUIPMENT OR THE SOFTWARE EVEN IF PANDESIC OR MERCHANT HAS
BEEN ADVISED OF THE POSSIBILITY THEREOF OR (II) ANY LOSS OF
DATA RESULTING FROM DELAYS, NON-DELIVERIES, MIS-DELIVERIES OR
SERVICE INTERRUPTIONS CAUSED BY PANDESIC OR MERCHANT. In no
event shall Merchant or Pandesic's aggregate cumulative
liability for any damages whatsoever to Merchant or Pandesic,
their employees, officers, directors, agents or contractors
arising out of or related to this Agreement exceed the amount
paid by Merchant or Pandesic, during the term, with respect to
the Services.
12.2 Neither Pandesic nor any of its officers, directors,
employees, contractors or agents shall be liable for any
damage or destruction of equipment or other materials
belonging to, leased by, or otherwise under the control of
Merchant, whether or not any such equipment or Materials are
at any time located in facilities owned or operated by
Pandesic, except where such damage or destruction is a direct
result of the gross negligence, recklessness or willful
misconduct of Pandesic or any of its officers, directors,
employees, contractors and agents.
12.3 The limitations of liability provided in this section shall
inure to the benefit of Merchant and Pandesic, Pandesic
Affiliates, Hosting Partner, Suppliers and to all of the
respective officers, directors, employees and agents of
Merchant and Pandesic and such other entities ("Limited
Liability Parties").
12.4 The limitations of liability in this Agreement shall apply
whether (i) the action in which recovery is sought is based in
contract, tort (including, but not limited to, negligence or
strict liability), statute or otherwise; or (ii) a Limited
Liability Party is alleged to be liable jointly with one or
more parties or otherwise.
13. TERM AND TERMINATION
13.1 The initial term of this Agreement shall commence on the
Contract Date and shall continue for twenty-four (24) months
from the date that the Pandesic software is loaded on the
servers and the servers are ready to accept Merchant's
configuration and functional installation of its products,
("Technical Installation"), following which it shall
automatically renew for successive twenty-four (24)-month
terms at the charges in effect at the commencement of each
such terms, unless written notice of non-renewal by either
party is delivered to the other party at least ninety (90)
days prior to the end of the then-current term.
13.2 TERMINATION BY PANDESIC
13.2.1 In addition to any other rights it may have under this
Agreement or applicable law, Pandesic may, at its
option, immediately terminate this Agreement, upon (i)
a Payment Default, which is not cured within fifteen
(15) business days of notice of such default (ii)
Merchants failure to comply with any other material
obligation of Merchant under this Agreement including,
but not limited to, its failure to comply with any of
the terms of the Use Policy, which is not cured within
fifteen (15) business days of notice of such default
(iii) Merchant ceasing to do business in the normal
course, becoming or being declared insolvent or
bankrupt, being the subject of any proceeding relating
to liquidation or insolvency which is not dismissed
ninety (90) calendar days or making an assignment for
the benefit of its creditors, (iv) any attempt that is
prohibited under this Agreement by Merchant to derive
any source code from the Software, (v) breach of
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PANDESIC AGREEMENT
TERMS AND CONDITIONS
Merchant's obligations under Section 5 hereto, or (vi)
Pandesic, Hosting Partner or any Supplier becomes the
subject of an investigation by a law enforcement agency
not withdrawn within ninety (90) days or threatened
with prosecution as a result of Merchant's use of the
Services.
13.2.2 Pandesic may, at its option, terminate this Agreement
and retain the initial set-up charge paid by Merchant
in the event that Merchant does not complete its
pre-work obligations to permit deployment of the
Pandesic E-Business Solution Service by Pandesic within
six (6) months of the Contract Date.
13.3 TERMINATION BY MERCHANT
13.3.1 Merchant may terminate this Agreement in the event of a
material breach by Pandesic of its obligations under
this Agreement which breach is not cured within fifteen
(15) business days after written notice thereof is
received by Pandesic (a "Permissible Termination")
other than breaches that have defined remedies
associated therewith. In the event of a Permissible
Termination, Merchant shall pay a pro-rated Monthly
Transaction Fee based on the number of days Pandesic
provided Services prior to the date of termination of
this Agreement by Merchant under this Section 13.3, if
the level of Fees for such month would fall within the
Monthly Base Fee.
13.3.2 If Merchant terminates this Agreement other than in a
Permissible Termination, Merchant agrees that it would
be impractical and/or extremely difficult to fix or
establish the actual damage sustained by Pandesic as a
result of such termination and agrees that Merchant
shall pay to Pandesic as liquidated damages an amount
equal to [***].
13.3.3 Merchant may also terminate this Agreement in the event
that Pandesic (i) becomes insolvent, or files or has
filed against it any proceeding in bankruptcy or for
reorganization under any federal bankruptcy law or
similar state law, or has any receiver appointed for
all or a substantial part of Pandesic's assets or
business, or makes any assignment for the benefit of
its creditors, or enters into any other proceeding for
debt relief and such proceeding is not dismissed within
ninety (90) days after it has begun; or (ii) ceases to
do business or institutes any proceedings for the
liquidation or winding up of its business or for the
termination of its corporate charter. Within thirty
(30) days of termination by Merchant pursuant to (i) or
(ii) above, Pandesic shall provide the Source Code and
the compiled executables to Merchant. For purposes of
this Section 13.3.3 only, Source Code shall be defined
as one copy of the source code and related documents
which pertain to the Pandesic-owned portion of the
Software only, without updates. In the event that the
Source Code is released to Merchant pursuant to (i) or
(ii) above, Pandesic hereby grants Merchant the
royalty-free right to use such Source Code solely for
the purpose of maintaining its object code version of
the Pandesic-owned portion of the Software as of the
date this Agreement terminates in accordance with this
Section 13 of this Agreement and for no other reason
whatsoever.
13.4 Upon termination of this Agreement, Pandesic and Merchant
shall have no obligations to each other except as provided in
this Agreement. Upon termination of this Agreement, Merchant
shall (i) pay all amounts due and owing to Pandesic, (ii)
remove from Pandesic's and Hosting Partner's premises all
property owned by Merchant in respect of the Services
provided, and (iii) return to Pandesic all equipment,
documentation, software, access keys and any other property
provided to Merchant by Pandesic under this Agreement. Any
property of Merchant not removed from Pandesic's and Hosting
Partner's premises. Within ten (10) days after such
termination shall become the property of Pandesic, which may,
among other things, dispose of such property without the
payment of any compensation to Merchant. Pandesic shall return
to Merchant all of its data residing on the Pandesic Equipment
provided, however, that in the event that Merchant gives
Pandesic written notice that Merchant can not immediately
provide for the receipt of Merchants data residing on the
Pandesic Equipment, this Agreement will continue in effect
until such data is
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confidential redacted portion has been omitted and filed separately with the
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PANDESIC AGREEMENT
TERMS AND CONDITIONS
returned, Pandesic agrees to continue to host such data for up
to sixty (60) days from the date of such notice, and Merchant
agrees to continue to pay Pandesic and provided for in this
Agreement The rights and obligations of the parties hereto
which by their nature would continue beyond the termination or
cancellation of this Agreement (Including, without limitation,
those relating to confidentiality, payment of charges,
limitations of liability and indemnification) shall survive
any such termination or cancellation.
14. DISPUTE RESOLUTION
14.1 If a dispute or difference of any kind whatsoever (a
"Dispute") shall arise between Pandesic and Merchant in
connection with, relating to or arising out of this Agreement,
including the interpretation, performance, non-performance, or
termination hereof, the parties shall attempt to settle such
Dispute in the first instance by mutual discussions. If such
Dispute has not been resolved within thirty (30) days by
mutual discussions, the parties shall endeavor to settle the
Dispute by mediation under the Mediation Rules of the American
Arbitration Association prior to any recourse to arbitration
pursuant to Section 14.2 below.
14.2 If such Dispute cannot be settled within thirty (30) days
after submission to mediation pursuant to Section 14.1 above
(the "Mediation Period"), such Dispute shall be settled by an
arbitral tribunal (the "Tribunal") under the Arbitration Rules
of the American Arbitration Association (the "Arbitration
Rules"). Each party shall appoint an arbitrator within thirty
(30) days after the expiration of the Mediation Period, which
arbitrators shall then jointly appoint a third arbitrator
within thirty (30) days after the appointment of the first two
arbitrators, to act as president of the Tribunal. Arbitrators
not so appointed shall be appointed pursuant to the
Arbitration Rules. The costs of the arbitration shall be borne
by the parties as determined by the Tribunal. The award
rendered in any arbitration commenced hereunder shall be final
and conclusive and judgment thereon may be entered in any
court having jurisdiction for its enforcement. Neither party
shall (i) appeal to any court from the decision of the
Tribunal; or (ii) have any right to commence or maintain any
suit or legal proceeding concerning a Dispute until such
Dispute has been determined in accordance with the arbitration
procedure provided for herein, and then only for enforcement
of the award rendered in such arbitration.
14.3 Notwithstanding the foregoing, nothing in Sections 14.1 or
14.2 shall be deemed as preventing either party from seeking
injunctive relief from the courts pursuant to Section 14.4
below. All mediation and arbitration proceedings -pursuant to
this Agreement shall take place in Santa Clara County,
California.
14.4 Notwithstanding the foregoing, each party acknowledges that
violation of Section 5.2 will cause irreparable harm to the
other not adequately compensable by monetary damages. In
addition to other relief, each party agrees that injunctive
relief shall be available to the other in the event of such
violations without necessity of posting bond to prevent any
actual or threatened violation of such section.
15. GENERAL
15.1 Neither Merchant nor Pandesic shall be deemed to be in default
of any provision of this Agreement or be liable for any delay,
failure of performance of obligations or interruption of the
provision of Services under this Agreement resulting, directly
or indirectly, from any (i) weather conditions, natural
disasters or other acts of God, (ii) action of any
governmental or military authority, (iii) failure caused by
telecommunication or other Internet provider (but not
including Hosting Partner), or (iv) any other force or
occurrence beyond its control, including any termination of
the agreement between Pandesic and the Hosting Partner.
15.2 Hosting Partner and Suppliers are third-party beneficiaries to
this Agreement to the extent that this Agreement contains
provisions which relate to Merchants use of Hosting Partner's
services or the Supplier Software. Such provisions are made
for the benefit of such third parties and are enforceable by
them in addition to Pandesic.
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PANDESIC AGREEMENT
TERMS AND CONDITIONS
15.3 Unless otherwise specified herein, any notices or other
communications required or permitted hereunder shall be
sufficiently given if in writing and delivered personally or
sent by facsimile transmission, email, internationally
recognized overnight courier, registered or certified mail
(postage prepaid with return receipt requested), to the
address or facsimile number of Merchant as set forth in the
Order Form or Pandesic as set forth below. In addition to the
obligations set forth herein, in the event that Pandesic sends
to Merchant any notice or other communication of Merchants
material breach of this Agreement, Pandesic shall provide any
such notice to Michelle Katz, Esq., Lenard and Gonzales, 1900
Avenue of the Stars, 25th Floor, Los Angeles, CA 90067. Such
notices or other communications shall be deemed received (i)
on the date delivered, if delivered personally, (ii) on the
date that return confirmation is received, if sent by
facsimile; (iii) on the business day after being sent by an
internationally recognized overnight air courier, or (iv) five
(5) days after being sent, if sent by first class registered
mail, return receipt requested.
Pandesic LLC
990 Almanor Avenue
Sunnyvale, California 94086
Attention: Director of Law & Corporate Affairs
Facsimile Number (408) 616-1920
15.4 Any claims arising out of or related to this Agreement must be
brought no later than one year after it has accrued.
15.5 Nothing in this Agreement or in the course of dealing between
Pandesic and Merchant pursuant hereto shall be deemed to
create between Pandesic and Merchant (including their
respective directors, officers, employees and agents) a
partnership, joint venture, association, employment
relationship or any other relationship other than that of
independent contractors with respect to each other.
15.6 This Agreement shall be governed by and construed in
accordance with the laws of the State of California without
regard to choice of law provisions that would cause the
application of the law of another jurisdiction.
15.7 Failure by either Pandesic or Merchant to enforce any of the
provisions of this Agreement or any rights with respect hereto
shall not be considered to be waiver of such provisions or
rights, or to in any way affect the validity of this
Agreement.
15.8 If one or more of the provisions contained in this Agreement
are found to be invalid, illegal or unenforceable in any
respect the validity, legality and enforceability of the
remaining provisions shall not be affected.
15.9 This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
15.10 Pandesic may change its Hosting Partner at any time in its
sole discretion.
15.11 Upon reasonable notice and in a manner which does not unduly
interfere with Merchants operations, Pandesic shall have the
right to audit and inspect Merchant's use of the Pandesic
E-Business Solution Service and the sales records associated
therewith in order to verify compliance with the terms of this
Agreement In the event there is a discrepancy of [***], or
more in the accounts, Merchant shall be responsible for and
shall pay the reasonable costs of such audit to Pandesic.
15.12 Pandesic, as part of its E-Business Solutions Services
provides certain equipment to Merchant for use in connection
with the said Services. Merchant holds such equipment subject
and subordinate to the rights of Pandesic. Merchant will keep
such equipment free from any liens or encumbrances whatsoever
and will indemnify and hold Pandesic harmless from it failure
to do so. Merchant will
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confidential redacted portion has been omitted and filed separately with the
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PANDESIC AGREEMENT
TERMS AND CONDITIONS
use commercially reasonable efforts to maintain such equipment
in good operating order, protect such from deterioration other
than normal wear and tear and will not use such for any
purposes other than contemplated herein.
15.13 This Agreement constitutes the entire agreement of the parties
and supersedes all oral negotiations and prior writings with
respect thereto. Except as set forth in Section 13 above, this
Agreement may not be amended, modified or terminated unless it
is in writing signed by both parties hereto.
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PANDESIC AGREEMENT
TERMS AND CONDITIONS
ACCEPTANCE
ACCEPTED BY MERCHANT: ACCEPTED BY PANDESIC LLC:
SIGNATURE: /s/ Marc P. Geiger SIGNATURE: /s/ Peter Wolcott
------------------------------ ------------------------------
PRINT NAME: Marc P. Geiger PRINT NAME: Peter Wolcott
------------------------------ ------------------------------
TITLE: CHIEF EXECUTIVE OFFICER TITLE: President
------------------------------ ------------------------------
DATE: April 15, 1999 DATE: 5/2/99
------------------------------ ------------------------------
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EXHIBIT A
ADDITIONAL SERVICES
Artist Direct/Ultimate Band List (UBL.com)
Per discussions between Pascal Desmarets and Harold Hughes and Rob
Vickery held on April 14, 1999 at Artist Direct headquarters on behalf
of Merchant and Pandesic, respectively, Merchant and Pandesic agree to
the following:
1. Pandesic agrees to make a standalone FI/CO instance and such services as
the parties mutually agree available to Merchant for the duration of the
agreement. Merchant agrees to make an expert (or any equivalent
consultant services) in the FI/CO modules of SAP R/3 available to
Pandesic for the term of the FI/CO installation project.
2. Pandesic will operate Artist Direct and UBL stores on the same
installation of Pandesic 3.0.
3. Pandesic will use its best efforts to deploy initial Artist Direct
stores within 6 weeks of the date of technical install. Pandesic will
make best efforts to condense this effort to 4 weeks but makes no
commitments that any such deployment will be made in less than 6 weeks
from the date of technical install.
4. Pandesic will commit to Cybersource fraud detection and payment
integration for Romeo. Transaction fees associated with all Cybersource
services will be the complete responsibility of Merchant.
5. Pandesic will deliver procurement functionality as part of the Romeo
release. Until the Romeo release, Merchant will utilize the procurement
processes utilized by DVD Express.
6. Fulfillment with Alliance Entertainment is completely the responsibility
of Merchant. Should Pandesic be required to provide any personnel for
implementation and/or testing, these personnel will be billable at
[***]. Pandesic will ensure that the fulfillment API functions as
documented.
7. Wholesale Orders - Pandesic will provide a "work around" to handle
multiple shipments/line item. Pandesic will use its best efforts to
provide the functionality within R/3 for Romeo to handle multiple
shipments/line item.
8. Pandesic will allow Merchant to use the I/Pro Agent on Pandesic servers
provided that any such use does not negatively impact Pandesic services.
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[***] Confidential treatment has been requested for the bracketed portion.
The confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.