Advertising and Promotion Agreement - Yahoo! Inc. and ARTISTdirect Inc.
ADVERTISING AND PROMOTION AGREEMENT
This Advertising and Promotion Agreement (the "Agreement") is entered into this
24th day of December, 1999 (the "Effective Date") between Yahoo! Inc. ("Yahoo"),
a Delaware corporation with offices at 3420 Central Expressway, Santa Clara, CA
95051, and ARTISTdirect, Inc. ("ARTISTdirect"), a Delaware corporation with
offices at 17835 Ventura Boulevard, Suite 310, Encino, CA 91316.
In consideration of the mutual promises contained in this
Agreement, Yahoo and ARTISTdirect hereby agree as follows:
1. DEFINITIONS.
The following terms are used in this Agreement with the
respective meanings set forth below:
"ARTISTdirect Banner" means an advertising unit that (a) promotes
Music Products, ARTISTdirect Content or music related services available on the
ARTISTdirect Network; (b) has dimensions no larger than 468 pixels wide by 60
pixels high; (c) does not contain more than six seconds of animation; (d) does
not contain "looped" animation; (e) has a file size no larger than 15K; and (f)
permits users to navigate directly to a Page on the ARTISTdirect Network
primarily related to the content in the ARTISTdirect Banner.
"ARTISTdirect Banner Category Pages" means those Pages within the
categories of the Yahoo Directory identified in Exhibit A.
"ARTISTdirect Banner Keywords" means those keywords identified in
Exhibit A, except that Yahoo may substitute a comparable keyword (based on
projected Page Views) for any ARTISTdirect Banner Keyword if it determines, in
its sole discretion, that such substitution is reasonably necessary to avoid
liability for third-party claims relating to alleged infringement or other
improper use of the particular ARTISTdirect Banner Keyword.
"ARTISTdirect Banner Pages" means the ARTISTdirect Banner
Category Pages and the ARTISTdirect Banner Search Results Pages.
"ARTISTdirect Banner Search Results Pages" means those Pages
displayed upon a user's search of the Yahoo Directory for an ARTISTdirect Banner
Keyword.
"ARTISTdirect Brand Features" means all trademarks, service
marks, logos and other distinctive brand features of ARTISTdirect that are used
in or relate to its business.
"ARTISTdirect Best Sellers Module" means an advertising unit
substantially similar in form to the example set forth in Exhibit C that (a)
contains a list of the top 5 best-selling recording artists, as provided by
ARTISTdirect on a weekly basis; (b) contains an ARTISTdirect Branded Link; and
(c) permits users to navigate directly to an ARTISTdirect Biased Buy Page from
each entry of the best-seller list.
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"ARTISTdirect Biased Buy Page" means a Page within Yahoo Shopping
(a) to which users click through directly from the ARTISTdirect Best Sellers
Module, the ARTISTdirect Billboard Module, the ARTISTdirect Buy It Button or the
ARTISTdirect New Releases Module; (b) which permits users to purchase the Music
Products promoted in the particular advertising unit only from the ARTISTdirect
RMI Site; and (c) which is substantially similar in form to the example set
forth in Exhibit D.
"ARTISTdirect Billboard Module" means an advertising unit
substantially similar in form to the example set forth in Exhibit E that (a)
contains a list of the top 10 albums of the Billboard 200 albums and the
corresponding recording artists, as provided by a third party; (b) contains an
ARTISTdirect Branded Link; and (c) permits users to navigate directly to an
ARTISTdirect Biased Buy Page from the first 10 album entries.
"ARTISTdirect Branded Link" means a Link substantially similar in
form to the example set forth in Exhibit F that (a) contains ARTISTdirect Brand
Features; (b) has dimensions no larger than 120 pixels wide by 20 pixels high;
(c) is saved in GIF or JPG format; (d) has a file size no larger than 2K; (e)
does not contain animation; (f) contains the phrase "Buy from" or comparable
purchase reference text; and (g) permits users to navigate directly to the front
Page of the ARTISTdirect RMI Site.
"ARTISTdirect Buy It Button" means an advertising unit
substantially similar in form to the example set forth in Exhibit G that (a) has
dimensions no larger than 88 pixels wide by 31 pixels high; (b) has a file size
no larger than 2K; (c) contains ARTISTdirect Brand Features; (d) contains text
that is provided by Yahoo; and (e) permits users to navigate directly to an
ARTISTdirect Biased Buy Page.
"ARTISTdirect Chat Banner" means an advertising unit
substantially similar in form to the example set forth in Exhibit X and to the
ARTISTdirect Banner, except that the ARTISTdirect Chat Banner (a) has dimensions
no larger than 468 pixels wide by 90 pixels high and (b) permits users to
navigate directly to a Page on the ARTISTdirect Network primarily related to the
content in the ARTISTdirect Chat Banner.
"ARTISTdirect Content" means all materials, data and similar
information relating to music that is collected or owned by ARTISTdirect, which
is a collection of HTML files, digital audio files and certain related scripts.
ARTISTdirect Content may include, but is not limited to (a) certain digital song
tracks and clips from the ARTISTdirect database; (b) certain recording artists
who participate in ARTISTdirect sponsored chat events; (c) certain webcasts of
music concerts or other music related events; and (d) certain auctions of Music
Products.
"ARTISTdirect Destination Page" means any Page on the
ARTISTdirect Network or the ARTISTdirect RMI Site to which users click through
directly from any ARTISTdirect Link. For clarity, ARTISTdirect Destination Page
does not mean any subsequent Page on the ARTISTdirect Network or the
ARTISTdirect RMI Site to which users navigate from the original Destination
Page.
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"ARTISTdirect DHTML Module" means an advertising unit
substantially similar in form to the example set forth in Exhibit H that will be
presented to the user in 1 of 2 views:
(1) Opening View. The Opening View of this advertising unit (a)
promotes certain Music Products, certain ARTISTdirect Content
or certain music related services available on the
ARTISTdirect Network, as further promoted in the Expanded
View of this advertising unit; (b) has dimensions no larger
than 130 pixels wide by 40 pixels high; (c) does not contain
animation; (d) may contain an image in GIF or JPG format; and
(e) has a file size no greater than 3K.
(2) Expanded View. The Expanded View of this advertising unit (a)
promotes Music Products, ARTISTdirect Content or music
related services available on the ARTISTdirect Network; (b)
has a width no larger than 130 pixels and a variable height
based on the number of characters used in accordance with
subsection (d) below; (c) does not contain animation; and (d)
contains headline text of no more than 18 characters,
including spaces, and body text of no more than 200
characters, including spaces. The body text may contain text
links that permit users to navigate directly to Pages on the
ARTISTdirect Network primarily related to the content in the
Expanded View of this advertising unit, as long as at least
one text link permits users to navigate directly to a Page on
the ARTISTdirect RMI Site dedicated to the on-line purchase
of the Music Products promoted in the Expanded View of this
advertising unit.
"ARTISTdirect E-Mail Message" means an electronic mail message
substantially similar in form to the example set forth in Exhibit I that (a)
presents users with a promotional offer regarding the on-line sale of Music
Products by ARTISTdirect or the provision of ARTISTdirect Content or music
related services by ARTISTdirect at no cost to the user (e.g., 30% discount on
the purchase of compact discs, free music downloads); (b) is targeted to
participating registered Yahoo Mail users who have indicated an interest in
music in their Yahoo profiles based on 1 of the following 5 variables (as
selected by ARTISTdirect and subject to availability), which are provided by
registered Yahoo Mail users upon registration: age, gender, occupation,
interest, zip code; (c) conforms to Yahoo Delivers' then current guidelines; (d)
is a single HTML message that does not exceed 425 pixels in width, which Yahoo
will enclose within a table and place between the required header and footer
information; (e) consists of HTML code that is free of errors and passes the
weblink validation checker; (f) has a total file size, including HTML code and
graphics, no larger than 30K; (g) does not have more than six seconds of
animation; (h) does not contain "looped" animation; (i) does not contain Java,
JavaScript, frames, ActiveX, or dynamic HTML; (j) does not have body background
image or color, except that colored tables may be used to simulate a background
color; (k) addresses users as Yahoo Delivers members (e.g., "An exclusive offer
for Yahoo Delivers members."); (l) has a subject line that contains no more than
35 characters, including spaces, and conforms to the following format: "Yahoo!
Delivers: A Special Offer from ARTISTdirect"; and (m) permits users to navigate
directly to a Page on the ARTISTdirect Network primarily related to the content
in the ARTISTdirect E-Mail Message.
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"ARTISTdirect Front Page Promotion" means a promotion that (a)
includes the ARTISTdirect Front Page Promotion Banner; (b) runs for at least 2
weeks, unless otherwise mutually agreed by the parties; (c) runs no more
frequently than once per calendar quarter; and (d) complies with Yahoo's then
current guidelines with respect to front Page promotions, currently located at
http://docs.yahoo.com/docs/advertising/csguide/index.html.
"ARTISTdirect Front Page Promotion Banner" means an advertising
unit substantially similar in form to the example set forth in Exhibit J that
(a) presents users with a promotional offer regarding the on-line sale of Music
Products by ARTISTdirect or the provision of ARTISTdirect Content or music
related services by ARTISTdirect at no cost to the user (e.g., 30% discount on
the purchase of compact discs, free music downloads, win tickets to see Sting in
concert); (b) has dimensions no larger than 230 pixels wide by 33 pixels high;
(c) does not contain more than 6 seconds of animation; (d) does not contain
"looped" animation; (e) has a file size no greater than 3K and (f) permits users
to navigate directly to a Page on the ARTISTdirect Network primarily related to
the content in the ARTISTdirect Banner.
"ARTISTdirect Keyword Module" means an advertising unit
substantially similar in form to the example set forth in Exhibit K that (a)
promotes the on-line sale of Music Products by ARTISTdirect; (b) has dimensions
no larger than 88 pixels wide by 31 pixels high; (c) does not contain animation;
(d) has a file size no greater than 2K (e) contains ARTISTdirect Brand Features
that permit users to navigate directly to the front Page of the ARTISTdirect RMI
Site; (f) contains 3 text links on 3 lines that do not exceed 16 characters per
line, including spaces; and (g) permits users to navigate directly to Pages on
the ARTISTdirect RMI Site that ARTISTdirect deems appropriate, except that each
Page must present users with a prominent opportunity to purchase on-line the
Music Products promoted in the ARTISTdirect Keyword Module.
"ARTISTdirect Keyword Module Category Pages" means those Pages
within the categories of the Yahoo Directory identified in Exhibit B, as amended
by Yahoo from time to time to account for changes in the organization of the
Yahoo Directory.
"ARTISTdirect Keyword Module Keywords" means those keywords
identified in Exhibit B, except that Yahoo may substitute a comparable keyword
(based on projected Page Views) for any ARTISTdirect Keyword Module Keyword if
it determines, in its sole discretion, that such substitution is reasonably
necessary to avoid liability for third-party claims relating to alleged
infringement or other improper use of the particular ARTISTdirect Keyword Module
Keyword.
"ARTISTdirect Keyword Module Pages" means the ARTISTdirect
Keyword Module Category Pages and the ARTISTdirect Keyword Module Search Results
Pages.
"ARTISTdirect Keyword Module Search Results Pages" means those
Pages displayed upon a user's search of the Yahoo Directory for an ARTISTdirect
Banner Keyword.
"ARTISTdirect Link" means any Link placed by Yahoo under this
Agreement, including but not limited to the ARTISTdirect Banner, the
ARTISTdirect Chat Banner, the ARTISTdirect Shopping Banner, the ARTISTdirect
Front Page Promotion Banner, the ARTISTdirect Best Sellers Module, the
ARTISTdirect Billboard Module, the ARTISTdirect Buy
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It Button, the ARTISTdirect DHTML Module, the ARTISTdirect Keyword Module, the
ARTISTdirect Message Boards Module, the ARTISTdirect New Releases Module, the
ARTISTdirect Sweepstakes Button, the ARTISTdirect Sweepstakes Text Link, the
Yahoo Mail Welcome Module and the Yahoo Mail Logout Module.
"ARTISTdirect Message Boards Module" means an advertising unit
substantially similar in form to the example set forth in Exhibit L that (a)
promotes Music Products, ARTISTdirect Content or music related services
available on the ARTISTdirect Network, except that the ARTISTdirect Message
Boards Module may not promote message boards on the ARTISTdirect Network; (b)
has dimensions no larger than 125 pixels wide by 125 pixels high; (c) does not
contain more than six seconds of animation; (d) does not contain "looped"
animation; (e) has a file size no greater than 10K; and (f) permits users to
navigate directly to a Page on the ARTISTdirect Network primarily related to the
content in the ARTISTdirect Message Boards Module.
"ARTISTdirect New Releases Module" means an advertising unit
substantially similar in form to the example set forth in Exhibit M that (a)
contains 3 images of album art, where each image has dimensions no larger than
80 pixels wide by 80 pixels high, a file size no greater than 3K and permits
users to navigate directly to an ARTISTdirect Biased Buy Page; (b) contains 3
lines of text, where each line provides either the name of the artist or the
title of the album in the corresponding image and serves as a text link that
permits users to navigate directly to an ARTISTdirect Biased Buy Page; and (c)
contains an ARTISTdirect Branded Link.
"ARTISTdirect Replacement Module" means an advertising unit that
(a) contains at least one link; (b) has dimensions no smaller than the
ARTISTdirect DHTML Module Opening View and no larger than the Expanded View; and
(c) has other specifications as mutually agreed upon by the parties.
"ARTISTdirect RMI Site" means those Pages within the ARTISTdirect
Network as hosted by Yahoo and included in the Yahoo Remote Merchant Integration
Program.
"ARTISTdirect Shopping Banner" means an advertising unit
substantially similar in form to the ARTISTdirect Banner, except that the
ARTISTdirect Shopping Banner permits users to navigate directly to a Page on the
ARTISTdirect RMI Site primarily related to the content in the ARTISTdirect
Shopping Banner.
"ARTISTdirect Network" means the Web properties owned or operated
on behalf of ARTISTdirect, which are dedicated to the on-line promotion and sale
of Music Products and are currently located at http://www.artistdirect.com,
http://www.ubl.com, http://www.imusic.com and http://www.downloadsdirect.com.
"ARTISTdirect Sweepstakes Button" means an advertising unit
substantially similar in form to the example set forth in Exhibit N that (a)
contains a sweepstakes with a minimum retail prize value of [***]* (to be
provided by Yahoo); (b) contains text that is provided by Yahoo in consultation
with ARTISTdirect; (c) permits users to interact with the
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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.
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ARTISTdirect Network as mutually agreed upon by the parties; (d) does not
contain ARTISTdirect Brand Features; (e) is further outlined in a production
scheduled mutually agreed upon by the parties; and (f) permits users to navigate
directly to an ARTISTdirect Sweepstakes Page that will contain ARTISTdirect
Brand Features, and the ARTISTdirect Brand Features permit users to navigate
directly to the front Page of the ARTISTdirect Network, currently located at
http://www.artistdirect.com.
"ARTISTdirect Sweepstakes Page" means a Page substantially
similar in form to the example set forth in Exhibit P that (a) is hosted by
Yahoo; (b) may contain Yahoo Brand Features and will contain ARTISTdirect Brand
Features that permit users to navigate directly to the front Page of the
ARTISTdirect Network, currently located at http://www.artistdirect.com; and (c)
permits user to register for a sweepstakes.
"ARTISTdirect Sweepstakes Text Link" means an advertising unit
substantially similar in form to the example set forth in Exhibit O that (a)
contains a sweepstakes with a minimum retail prize value of [***]* (to be
provided by Yahoo); (b) contains text that is provided by Yahoo in consultation
with ARTISTdirect; (c) permits users to interact with the ARTISTdirect Network
as mutually agreed upon by the parties; (d) does not contain ARTISTdirect Brand
Features; (e) is further outlined in a production scheduled mutually agreed upon
by the parties; and (f) permits users to navigate directly to an ARTISTdirect
Sweepstakes Page that will contain ARTISTdirect Brand Features, and the
ARTISTdirect Brand Features permit users to navigate directly to the front Page
of the ARTISTdirect Network, currently located at http://www.artistdirect.com.
"FTC Order" means that certain "Decision and Consent Order"
issued by the U.S. Federal Trade Commission on February 5, 1999 against
GeoCities, Inc., a California corporation acquired by Yahoo, attached hereto as
Exhibit T and any and all subsequent or related official materials, regulations,
laws judgements or orders.
"Launch Date" means the date on which the ARTISTdirect RMI Site
is made publicly available by Yahoo.
"Link" or "link" means a visible graphic or textual indicator
located within a Page that permits a user to navigate the World Wide Web; when
selected by a user, this indicator directs the user's internet browser
connection onward to a specified Page on the same or any other Web site via a
URL (whether perceptible or not) and establishes a direct connection between the
browser and the new Page.
"Music Merchant" means any company or other third party that
derives at least 50% of its revenue from the on-line sale of Music Products.
"Music Merchant Best Sellers Module" means an advertising unit
that (a) conforms to the specifications of the ARTISTdirect Best Sellers Module
and (b) is placed on the same Pages on which the ARTISTdirect Best Sellers
Module is placed.
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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.
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"Music Merchant Modules" means (a) the ARTISTdirect Billboard
Module, the ARTISTdirect Buy It Button, the ARTISTdirect DHTML Module, the
ARTISTdirect Keyword Module, the ARTISTdirect New Releases Module, the
ARTISTdirect Sweepstakes Button and the ARTISTdirect Sweepstakes Text Link, and
(b) those advertising units that (1) conform to the specifications of the
aforementioned ARTISTdirect advertising units and (2) are placed within the same
area of the same Pages on which the aforementioned ARTISTdirect advertising
units are placed, either adjacent to the aforementioned ARTISTdirect advertising
units or in rotation with the aforementioned ARTISTdirect advertising units.
"Music Products" means music recordings and other music related
merchandise (i.e., compact discs, cassettes tapes, mp3 files and other audio
formats, music videos and other audio/video formats, music concert memorabilia,
including but not limited to clothing and posters that commemorate the music
concert, and recording artist memorabilia, including but not limited to clothing
and posters that feature the recording artist).
"Music Merchant Program" means Yahoo's program consisting of
certain advertising and promotional activities with Music Merchants as further
described in this Agreement.
"Page" means any World Wide Web page (or, for on-line media other
than Web sites, the equivalent unit of the relevant protocol).
"Page View" mean a user's request for a Page as measured by
Yahoo's advertising reporting system.
"Run of Music Rooms" means banner placements in the south banner
position across the chat rooms within the music category of Yahoo Chat.
"Run of Network" means banner placements in the north banner
position across the Yahoo Properties.
"Run of Yahoo Music" means banner placements in the north banner
position across Yahoo Music.
"Run of Yahoo Shopping" means banner placements in the north
banner position across Yahoo Shopping.
"Term" means the period beginning on the Effective Date and
continuing for twenty-four (24) months from the Launch Date, unless either party
terminates this Agreement on an earlier date in accordance with Section 12.
"Yahoo Brand Features" means all trademarks, service marks, logos
and other distinctive brand features of Yahoo that are used in or relate to its
business.
"Yahoo Chat" means Yahoo's U.S. targeted chat property, currently
located at http://chat.yahoo.com.
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"Yahoo Delivers" means Yahoo's U.S. targeted direct marketing
program conducted via Yahoo Mail.
"Yahoo Digital" means Yahoo's U.S. targeted digital music
property, currently located at http://digital.yahoo.com.
"Yahoo Directory" means Yahoo's principal U.S. targeted directory
to the World Wide Web, currently located at http://www.yahoo.com.
"Yahoo Mail" means Yahoo's U.S. targeted electronic mail
property, currently located at http://mail.yahoo.com.
"Yahoo Mail Logout Module" means an advertising unit
substantially similar in form to the example set forth in Exhibit R that (a) is
targeted to certain registered Yahoo Mail users based on age, gender, interest
or occupation (e.g., users whose Yahoo profiles reflect an age between 18 and
35); (b) has dimensions no larger than 88 pixels wide by 31 pixels high; (c) has
a file size no greater than 2K; (d) contains no more than 25 characters of text,
including spaces; (e) contains a pull down menu with a file size no greater than
1.35K and with no more than 5 options; (f) does not contain animation; and (g)
permits users to navigate directly to a Page on the ARTISTdirect Network that
(1) is dedicated to the on-line purchase of the Music Products promoted in the
Yahoo Mail Logout Module or (2) presents users with a promotional offer
regarding the on-line sale of Music Products by ARTISTdirect or the provision of
ARTISTdirect Content or music related services by ARTISTdirect at no cost to the
user (e.g., free music downloads, access to ARTISTdirect Content that is not
available to the general public, discounts on the on-line purchase of Music
Products, free shipping and handling on the on-line purchase of Music Products).
"Yahoo Mail Logout Page" means a Page substantially similar in
form to the example set forth in Exhibit R that is the first Page presented to a
user after the user clicks on the "Sign Out" Link in Yahoo Mail.
"Yahoo Mail Welcome Module" means an advertising unit
substantially similar in form to the example set forth in Exhibit Q that (a) is
targeted to certain registered Yahoo Mail users based on age, gender, interest
or occupation (e.g., users whose Yahoo profiles reflect an age between 18 and
35); (b) has dimensions no larger than 88 pixels wide by 31 pixels high; (c) has
a file size no greater than 2K; (d) contains 2 lines of text, not to exceed 25
characters, including spaces, per line; (e) does not contain animation; and (f)
permits users to navigate directly to a Page on the ARTISTdirect Network that
(1) is dedicated to the on-line purchase of the Music Products promoted in the
Yahoo Mail Welcome Module or (2) presents users with a promotional offer
regarding the on-line sale of Music Products by ARTISTdirect or the provision of
ARTISTdirect Content or music related services by ARTISTdirect at no cost to the
user (e.g., free music downloads, access to ARTISTdirect Content that is not
available to the general public, discounts on the on-line purchase of Music
Products, free shipping and handling on the on-line purchase of Music Products).
"Yahoo Mail Welcome Page" means a Page substantially similar in
form to the example set forth in Exhibit Q that (a) is the first Page presented
to a user after the user
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successfully enters a Yahoo ID and password for a Yahoo Mail account and (b) is
presented to the user each time the user accesses the Yahoo Mail account before
clicking on the "Sign Out" Link in Yahoo Mail or before the Yahoo Mail system
signs out the user (e.g., for a sustained period of inactivity).
"Yahoo Message Boards" means Yahoo's U.S. targeted message board
property, currently located at http://messages.yahoo.com.
"Yahoo Music" means Yahoo's U.S. targeted music property,
currently located at http://music.yahoo.com.
"Yahoo Properties" means any Yahoo branded or co-branded media
properties, including but not limited to Internet guides, that are developed in
whole or in part by Yahoo or its affiliates.
"Yahoo Remote Merchant Integration Program" means that program
through which Yahoo integrates certain Web sites of remote on-line merchants
into Yahoo Shopping.
"Yahoo Remote Merchant Integration Program Agreement" means the
agreement set forth in Exhibit V.
"Yahoo Shopping" means Yahoo's U.S. targeted shopping property,
currently located at http://shopping.yahoo.com.
2. ARTISTDIRECT BANNERS.
2.1 Yahoo will provide the ARTISTdirect Banner, on a rotating
basis until its Page View obligation under Section 10.1 is
met, on ARTISTdirect Banner Pages, through Run of Yahoo
Music and, based on an interest in music (i.e., targeted to
registered Yahoo users who have indicated an interest in
music in their Yahoo profiles), through Run of Network.
2.2 Yahoo will provide the ARTISTdirect Chat Banner, on a
rotating basis until its Page View obligation under Section
10.1 is met, through Run of Music Rooms.
2.3 Yahoo will provide the ARTISTdirect Shopping Banner, on a
rotating basis until its Page View obligation under Section
10.1 is met, through Run of Yahoo Shopping.
2.4 Yahoo will provide the ARTISTdirect Front Page Promotion
Banner on a rotating basis in connection with the
ARTISTdirect Front Page Promotion.
3. ARTISTDIRECT BUTTONS AND MODULES.
3.1 During the Term, Yahoo will provide the ARTISTdirect Best
Sellers Module on Pages within Yahoo Digital, Yahoo Music
and Yahoo Shopping.
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3.2 Yahoo will provide the ARTISTdirect Billboard Module, on a
rotating basis with the corresponding Music Merchant Module
of the Selected Music Merchant (as defined in Section 9.1)
during the Term, on Pages within Yahoo Shopping.
3.3 Yahoo will provide the ARTISTdirect Buy It Button, on a
rotating basis with the corresponding Music Merchant Module
of the Selected Music Merchant during the Term, on Pages
within Yahoo Music.
3.4 Yahoo will provide the ARTISTdirect DHTML Module, on a
rotating basis with the corresponding Music Merchant Module
of the Selected Music Merchant during the Term, on Pages
within Yahoo Music. In the event that Yahoo cannot provide
the ARTISTdirect DHTML Module, Yahoo will provide the
ARTISTdirect Replacement Module on a rotating basis with
the Selected Music Merchant on Pages within Yahoo Music
during the time that Yahoo is unable to provide the
ARTISTdirect DHTML Module. The continued provision of the
ARTISTdirect Replacement Module will be subject to review
at the quarterly meetings described in Section 10.3.
3.5 Yahoo will provide the ARTISTdirect Keyword Module, on a
rotating basis with and adjacent to the corresponding Music
Merchant Module of the Selected Music Merchant during the
Term, on the ARTISTdirect Keyword Module Pages.
3.6 Yahoo will provide the ARTISTdirect Message Boards Module,
on a rotating basis until its Page View obligation under
Section 10.1 is met, on Pages within the music category of
Yahoo Message Boards.
3.7 Yahoo will provide the ARTISTdirect New Release Module, on
a rotating basis with the corresponding Music Merchant
Module of the Selected Music Merchant during the Term, on
Pages within Yahoo Shopping.
3.8 Yahoo will provide the Yahoo Mail Welcome Module, on a
rotating basis until its Page View obligation under Section
10.1 is met, on the Yahoo Mail Welcome Page.
3.9 Yahoo will provide the Yahoo Mail Logout Module, on a
rotating basis until its Page View obligation under Section
10.1 is met, on the Yahoo Mail Logout Page.
4. ARTISTDIRECT SWEEPSTAKES BUTTON AND SWEEPSTAKES TEXT LINK.
4.1 Yahoo will provide the ARTISTdirect Sweepstakes Button, on
a rotating basis with the corresponding Music Merchant
Module of the Selected Music Merchant until its Page View
obligation under Section 10.1 is met, on Pages within the
music category of Yahoo Shopping.
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4.2 Yahoo will provide the ARTISTdirect Sweepstakes Text Link,
on a rotating basis with the corresponding Music Merchant
Module of the Selected Music Merchant until its Page View
obligation under Section 10.1 is met, on Pages within Yahoo
Music.
4.3 Yahoo will provide as many as [***]* separate sweepstakes
(the "Sweepstakes") in connection with the ARTISTdirect
Sweepstakes Button and the ARTISTdirect Sweepstakes Text
Link. ARTISTdirect will be responsible for creating the
Sweepstakes, including but not limited to drafting the
official rules that will govern the Sweepstakes and the
acquisition and fulfillment of all prizes in connection
with the Sweepstakes, except that Yahoo will provide
ARTISTdirect with 1 prize of retail value not less than
[***]* for each Sweepstakes that is conducted under this
Agreement. The Sweepstakes will be (a) subject to Yahoo's
approval, which will not be unreasonably withheld, and (b)
conducted in accordance with Yahoo's then current
guidelines with respect to sweepstakes. The parties
acknowledge and agree that Yahoo's approval of the official
rules for the Sweepstakes will not constitute an opinion as
to the legal appropriateness or adequacy of such rules or
their manner of use.
4.4 In connection with the Sweepstakes, Yahoo will present
users who participate in the Sweepstakes with the
opportunity to receive an electronic mail message (the
"Follow-Up E-Mail"). Upon ARTISTdirect's election, Yahoo
will deliver the Follow-Up E-Mail on behalf of ARTISTdirect
to those users who opt to receive the Follow-Up E-Mail.
ARTISTdirect will provide to Yahoo all text of the
Follow-Up E-Mail, and such text will be subject to Yahoo's
approval, which will not be unreasonably withheld.
5. ARTISTDIRECT E-MAIL MESSAGE.
5.1 Yahoo will deliver [***]* ARTISTdirect E-Mail Messages to
those registered Yahoo Mail users who (a) have indicated in
their Yahoo Mail preferences an interest in music and a
willingness to receive promotional offers via Yahoo
Delivers and (b) have provided information in their Yahoo
profiles that matches the value selected by ARTISTdirect
for purposes of targeting the ARTISTdirect E-Mail Message.
Yahoo will deliver the ARTISTdirect E-Mail Message in
accordance with Yahoo's privacy policy.
5.2 ARTISTdirect will provide to Yahoo all text of the
ARTISTdirect E-Mail Message and any other materials
necessary for ARTISTdirect to participate in Yahoo
Delivers. Such materials will be (a) subject to Yahoo's
approval, which will not be unreasonably withheld, and (b)
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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.
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consistent with Yahoo's policies and guidelines for such
messages and for Yahoo Delivers generally.
6. ARTISTDIRECT FRONT PAGE PROMOTION.
6.1 During the Term, and in connection with the ARTISTdirect
Front Page Promotion Banner, Yahoo will provide the
ARTISTdirect Front Page Promotion no more frequently than
[***]* until its Page View obligation under Section 10.1 is
met.
7. ARTISTDIRECT CONTENT.
7.1 During the Term and in ARTISTdirect's sole discretion,
ARTISTdirect will apprise Yahoo of ARTISTdirect Content
when ARTISTdirect develops or acquires such ARTISTdirect
Content. Yahoo will, in its sole discretion, consider
ARTISTdirect Content for inclusion in appropriate areas of
the Yahoo Properties. Under no circumstances will
ARTISTdirect be under any obligation, express or implied,
to provide ARTISTdirect Content to Yahoo, nor will Yahoo be
under any obligation, express or implied, to include any
ARTISTdirect Content in any Yahoo Property. If Yahoo
chooses to include ARTISTdirect Content in any Yahoo
Property, the terms of such inclusion will be mutually
agreed upon by the parties.
8. IMPLEMENTATION.
8.1 Yahoo will be solely responsible for the user interface and
placement of the ARTISTdirect Links and ARTISTdirect will
be solely responsible for and will provide Yahoo with all
text, artwork and design elements of the ARTISTdirect
Links. The parties will use commercially reasonable efforts
to make available on Yahoo (a) the ARTISTdirect Banners on
or before January 7, 2000 and (b) the other ARTISTdirect
Links on or before January 14, 2000. In any event,
ARTISTdirect will deliver to Yahoo all the text, artwork
and design elements of the ARTISTdirect Banner no later
than January 7, 2000 and all text, artwork and design
elements of the other ARTISTdirect Links no later than
January 14, 2000.
8.2 Yahoo reserves the right, at any time, to redesign or
modify the organization, structure, specifications, "look
and feel," navigation, guidelines and other elements of the
ARTISTdirect Links or any Yahoo Property on which an
ARTISTdirect Link is placed. If such a modification
materially and adversely affects any specific ARTISTdirect
Link, Yahoo will provide ARTISTdirect, as its sole remedy,
with a comparable promotional placement on the Yahoo
Properties.
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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.
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8.3 ARTISTdirect will provide to Yahoo all URLs, URL formats
(as applicable), content and other materials necessary for
Yahoo to provide the ARTISTdirect Links in accordance with
the specifications set forth in this Agreement and Yahoo's
standard advertising guidelines, currently located at
http://docs.yahoo.com/docs/advertising/ (the "ARTISTdirect
Deliverables") on or before the ARTISTdirect Deliverables
Due Date. All content and material contained in the
ARTISTdirect Links will be subject to Yahoo's approval,
which will not be unreasonably withheld, and must comply
with all applicable federal, state and local laws, rules
and regulations, including but not limited to consumer
protection laws and any rules and regulations governing
product claims, truth in labeling or false advertising.
8.4 During the Term, ARTISTdirect hereby grants to Yahoo a
non-exclusive, non-transferable, non-sublicensable,
worldwide, fully paid license to use, reproduce and display
the ARTISTdirect Brand Features solely (a) to indicate the
location of the ARTISTdirect Links as set forth herein and
(b) in connection with the marketing and promotion of
ARTISTdirect in the Yahoo Properties pursuant to this
Agreement.
8.5 In no event will any ARTISTdirect Destination Page contain
graphic or text links, advertisements or promotions of
[***]* (the "Yahoo Competitors"). Yahoo will be entitled to
update the list of Yahoo Competitors on a quarterly basis.
The foregoing exclusion of Yahoo Competitors does not apply
to any graphic or text link that serves as attribution for,
and appears adjacent to, original content that is presented
on an ARTISTdirect Destination Page, unless Yahoo
determines, in its reasonable discretion, that such link is
promotional in nature. If Yahoo makes such a determination,
or if Yahoo becomes aware of any link, advertisement or
promotion that potentially violates this Section 8.5,
Yahoo will notify ARTISTdirect and may request that
ARTISTdirect (a) remove, revise or replace suck link,
advertisement or promotion; (b) specify a different
Destination Page to which the particular advertising unit
will direct users; or (c) any alternative solution to which
the parties mutually agree. If the parties cannot resolve
the matter within 5 business days of Yahoo's notice to
ARTISTdirect, Yahoo reserves the right to remove or disable
the particular advertising unit and to prorate its Page
View obligation for this Music Merchant Program as a whole
(e.g., based on the Page View allocation set forth in
Section 10.2(d) and a 24 month Term, if Yahoo were to
remove or disable the ARTISTdirect Chat Banner under this
Section 8.5 and the parties did not resolve the matter for
10 days, then Yahoo's Page View obligation for this Music
Merchant Program would be reduced by [***]* Page Views.
8.6 Within 45 days after the Effective Date of this
Agreement, ARTISTdirect will place a Yahoo graphic link on
all ARTISTdirect Destination Pages. The Yahoo graphic link
must (a) be placed in a manner approved by Yahoo, which
approval will not be unreasonably withheld; (b) contain
the Yahoo name and logo as provided by Yahoo; and (c)
directly link the user back to a Page on the Yahoo
Properties designated by Yahoo.
8.7 During the Term, Yahoo hereby grants to ARTISTdirect a
non-exclusive, worldwide, fully paid license to use,
reproduce and display the Yahoo Brand Features as described
in Section 8.6.
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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.
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8.8 ARTISTdirect and Yahoo will execute the Yahoo Remote
Merchant Integration Program Agreement, attached hereto as
Exhibit V, on the Effective Date of this Agreement.
8.9 ARTISTdirect will issue to Yahoo a warrant (the "Warrant")
substantially in the form attached hereto as Exhibit W on
the Effective Date of this Agreement.
8.10 The ARTISTdirect Network will (a) handle [***]*
simultaneous requests; (b) have a minimum [***]* uptime and
maximum [***]* downtime per calendar quarter of the term
(except for planned downtime that may be required for
system enhancements, upgrades or preventative maintenance);
and (c) ensure that data transfers from the ARTISTdirect
Network to the Yahoo Properties initiate within fewer than
[***]* seconds, on average, of request. The parties
acknowledge and agree that a failure of the ARTISTdirect
Network to meet the aforementioned performance standards
for any calendar quarter is a material breach for the
purposes of Section 12.2(b).
8.11 Within 90 days after the Effective Date of this Agreement,
the parties will use commercially reasonable efforts (e.g.,
Yahoo making a written request to Media Metrix), to credit
ARTISTdirect with the traffic and reach statistics
generated from users who view Pages on the ARTISTdirect RMI
Site, as reported by Media Metrix. If the parties cannot
devise a means of officially crediting ARTISTdirect with
these statistics, either by a change in technology or by a
change in Media Metrix's reporting policies, ARTISTdirect's
sole remedy will be to raise the issue during the quarterly
review set forth in Section 10.3.
9. LIMITED EXCLUSIVITY; RIGHT OF FIRST PRESENTATION.
9.1 Commencing on January 1, 2000 and continuing through the
Term, Yahoo will (a) not sell the Music Merchant Best
Sellers Module to any third party; (b) not sell the Music
Merchant Modules to more than 1 Music Merchant (the
"Selected Music Merchant"); and (c) except as set forth in
subsection (b) above, not sell the right to present users
with an explicit offer to purchase Music Products on-line
(e.g., "Click here to buy the new Madonna album.") in the
text of any advertising unit that is place on an
ARTISTdirect Keyword Module Page or a Page within Yahoo
Music on which an ARTISTdirect Best Sellers Module, an
ARTISTdirect Buy It Button, an ARTISTdirect DHTML Module or
an ARTISTdirect Sweepstakes Text Link is placed.
9.2 The parties acknowledge and agree that, with respect to the
Music Merchant Modules only, placement of ARTISTdirect's
Music Merchant Modules will rotate equally with placement
of the Music Merchant Modules of the Selected Music
Merchant.
9.3 ARTISTdirect acknowledges and agrees that, except with
respect to the foregoing limited exclusivity of Sections
9.1 and 9.2 above, Yahoo is not precluded from, among other
things, promoting or placing any advertising units of a
Music Merchant or any other entity in any area of the Yahoo
Properties.
9.4 In the event that Yahoo develops enhancements that
materially improve the size, appearance or placement of (a)
any ARTISTdirect Link or (b) any other advertising unit
made available to Music Merchants generally,
--------
* 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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Yahoo will provide ARTISTdirect with written notice of such
enhancements prior to their release and will describe
Yahoo's reasonable business requirements for providing such
enhancements to ARTISTdirect.
9.5 In the event that Yahoo, in its sole discretion, elects (a)
to extend this Music Merchant Program beyond the Term or
(b) subject to the limited exclusivity set forth in Section
9.1 above, to develop for any area of the Yahoo Properties
a new merchant advertising program that promotes either the
on-line sale of Music Products or the on-line offering of
music-related content and is projected to generate 500
million or more Page Views, Yahoo will provide written
notice to ARTISTdirect that describes Yahoo's reasonable
business requirements for participation in such program
(the "Presentment Notice"). With respect to an extension of
this Music Merchant Program, Yahoo will provide a
Presentment Notice to ARTISTdirect at least 30 days prior
to the expiration of the Term. The parties will use good
faith efforts to negotiate and execute a written agreement
under reasonable terms and conditions with respect to any
opportunity presented in a Presentment Notice. If
ARTISTdirect declines to commence negotiations with Yahoo
within 5 days after ARTISTdirect receives a Presentment
Notice from Yahoo, or if the parties fail to reach
agreement within 30 days following the commencement of good
faith negotiations, or such later date as is agreed by the
parties, Yahoo may offer the opportunity to any third
party.
10. PAGE VIEWS.
10.1 With respect to the ARTISTdirect Links, Yahoo will deliver
a minimum of [***]* Page Views.
10.2 Yahoo will use commercially reasonable efforts to deliver
the aforementioned Page Views according to the allocation
set forth below, but Yahoo's Page View obligation is with
respect to the Music Merchant Program as a whole. Yahoo
will not be in breach of this Agreement for failure to
deliver the specific number of Page Views in any of the
areas set forth below:
(a) [***]* Page Views of the ARTISTdirect Front Page
Promotion Banner;
(b) [***]* Page Views of the Yahoo Mail Welcome Module and
the Yahoo Mail Logout Module;
(c) [***]* Page Views of the ARTISTdirect Banner as
follows:
(1) [***]* Page Views through Run of Network based on
an interest in music (i.e., targeted to
registered Yahoo users who have indicated an
interest in music in their Yahoo profiles);
(2) [***]* Page Views through Run of Yahoo Music;
(3) [***]* Page Views on ARTISTdirect Banner Category
Pages;
(4) [***]* Page Views on ARTISTdirect Banner Search
Results Pages;
(d) [***]* Page Views of the ARTISTdirect Chat Banner;
(e) [***]* Page Views of the ARTISTdirect Shopping Banner;
(f) [***]* Page Views of the ARTISTdirect Message Boards
Module;
(g) [***]* Page Views of the ARTISTdirect DHTML Modules;
(h) [***]* Page Views of the ARTISTdirect Sweepstakes Text
Link;
(i) [***]* Page Views of the ARTISTdirect Sweepstakes
Button;
(j) [***]* Page Views of the ARTISTdirect Best Sellers
Module;
(k) [***]* Page Views of the ARTISTdirect Billboard
Module;
(l) [***]* Page Views of the ARTISTdirect New Releases
Module;
(m) [***]* Page Views of the ARTISTdirect Keyword Module;
(n) [***]* Page Views of the ARTISTdirect Buy It Button.
10.3 On a quarterly basis, Yahoo and ARTISTdirect will meet to
discuss the performance of this Music Merchant Program as a
whole and agree to consider in good faith ways to optimize
elements of this Music Merchant Program. In the event that
Yahoo fails to deliver the number of Page Views set forth
in Section 10.1 before expiration of the Term, Yahoo will
"make good" the shortfall by extending its obligations
under Sections 2.3 and 4 in the areas of the Yahoo
Properties set forth therein (or similar inventory mutually
agreed upon by the parties) beyond the end of the Term (at
no additional fee to ARTISTdirect beyond those fees set
forth in Section 11) until such Page View obligation is
satisfied. If Yahoo does not satisfy its Page View
obligation within 120 days after the expiration of the
Term, then ARTISTdirect will be entitled to a prorated
refund equal to the amount calculated by multiplying the
CPM [***]* by the undelivered number of Page Views divided
by 1000, payable 20 days after the third party audit of the
most recent applicable quarter. The parties acknowledge and
agree that the CPM referenced above has no other
significance in this Agreement other than to calculate the
prorated refund due to ARTISTdirect. The provisions of this
Section 10.3 set forth the entire liability of Yahoo, and
ARTISTdirect's sole remedy, for Yahoo's failure to meet its
Page View obligation set forth in Section 10.1.
10.4 On a regular basis and at ARTISTdirect's reasonable
request, Yahoo will provide ARTISTdirect with access to an
electronic database, the accuracy of which is periodically
reviewed and certified by Ernst & Young, LLP or a similarly
reputable and independent entity, that describes in
reasonable detail Yahoo's calculation of the Page Views
delivered under this Agreement. To the extent that Yahoo
elects, in its sole discretion, to conduct research or
analysis on behalf of or at the direction of ARTISTdirect,
Yahoo will share its results with ARTISTdirect at no
additional fee to ARTISTdirect beyond those fees set forth
in Section 11.
11. COMPENSATION.
11.1 Slotting Fee. In consideration of Yahoo's performance and
obligations as set forth herein, ARTISTdirect will pay to
Yahoo a non-refundable, non-creditable slotting fee equal
to nineteen million, eight hundred thousand dollars
($19,800,000), of which eighteen million, eight hundred
thousand dollars ($18,800,000) will be paid to Yahoo on or
before the dates set forth in the payment schedule below,
and one million dollars ($1,000,000) will be provided to
Yahoo in the form of in kind co-marketing opportunities,
such co-marketing opportunities to be mutually agreed upon
by the parties within 90 days after the Effective Date. One
million dollars ($1,000,000) of the first payment set forth
in the payment schedule below will be designated as a
--------
* 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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set up fee for the design, consultation, development,
implementation and placement of the ARTISTdirect Links.
Payment Date
------- ----
$5,500,000 Due upon execution of Agreement
$1,900,000 On or before March 15, 2000
$1,900,000 On or before June 15, 2000
$1,900,000 On or before September 15, 2000
$1,900,000 On or before December 15, 2000
$1,900,000 On or before March 15, 2001
$1,900,000 On or before June 15, 2001
$1,900,000 On or before September 15, 2001
11.2 Payment Information. Except as set forth in Section 10.3,
all payments herein are non-refundable and non-creditable
and will be made by ARTISTdirect via wire transfer into
Yahoo's main account according to the wire transfer
instructions set forth on Exhibit S.
11.3 Late Payments. Any portion of the above payments that has
not been paid to Yahoo within 5 days after the dates set
forth above will bear interest at the lesser of (a) one
percent (1%) per month or (b) the maximum amount allowed
by law. Notwithstanding the foregoing, any failure by
ARTISTdirect to make the payments specified in Section 11.1
on the dates set forth therein constitutes a material
breach of this Agreement.
11.4 Ability to Pay. ARTISTdirect represents and warrants that
it has the ability to pay to Yahoo all fees set forth in
this Agreement.
12. TERM AND TERMINATION.
12.1 Term. This Agreement will commence upon the Effective Date
and, unless terminated as provided herein, will remain in
effect for the Term.
12.2 Termination by Either Party with Cause. This Agreement may
be terminated at any time by either party (a) immediately
upon written notice if the other party (1) becomes
insolvent; (2) files a petition in bankruptcy; or (3) makes
an assignment for the benefit of its creditors; or (b) 30
days after written notice to the other party of such other
party's breach of any of its obligations under this
Agreement in any material respect (20 days in the case of a
failure to pay), which breach is not remedied within such
notice period. In the event that ARTISTdirect does not
remedy a breach of its payment obligation under this
Agreement within 20 days of Yahoo's written notice to
ARTISTdirect, Yahoo will be entitled to suspend its
performance under this Agreement immediately. Any notice of
breach provided in accordance with subsection (b) will
describe any termination of the Warrant that will result
from such breach.
12.3 Survival. The provisions of Sections 1, 10.3, 11, 13
through 17 and this 12.3 will survive expiration or
termination of this Agreement, except that ARTISTdirect's
payment obligations set forth in Section 11.1 will not
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survive a proper termination of this Agreement by
ARTISTdirect in accordance with Section 12.2.
13. CONFIDENTIAL INFORMATION AND PUBLICITY.
13.1 Terms and Conditions. The terms and conditions of this
Agreement will be considered confidential and will not be
disclosed to any third parties except to such party's
accountants, attorneys or except as otherwise required by
law. Neither party will make any public announcement
regarding the existence of this Agreement without the other
party's prior written approval and consent. If this
Agreement or any of its terms must be disclosed under any
law, rule or regulation (e.g., as part of a filing with the
United States Securities and Exchange Commission),
excluding an order or other discovery request issued by a
court of competent jurisdiction, the disclosing party will
(a) give written notice of the intended disclosure to the
other party at least 3 days in advance of the date of
disclosure; (b) redact portions of this Agreement to the
fullest extent permitted under any applicable laws, rules
and regulations; and (c) submit a request, to be agreed
upon by the other party, that such portions and other
provisions of this Agreement requested by the other party
receive confidential treatment under the laws, rules and
regulations of the body or tribunal to which disclosure is
being made or otherwise be held in the strictest confidence
to the fullest extent permitted under the laws, rules or
regulations of any other applicable governing body. With
respect to a party's responses to the United States
Securities and Exchange Commission's comments on a
confidential treatment request, the disclosing party will
use best efforts to provide the other party with reasonable
prior notice of the intended disclosure, but a failure to
provide such notice will not be deemed a breach of this
Agreement.
13.2 Publicity. Yahoo and ARTISTdirect will jointly issue a
press release announcing this Agreement. The parties will
use commercially reasonable efforts to issue a joint press
release announcing this Agreement within 10 days after the
Launch Date, but no sooner than January 1, 2000. Any and
all publicity relating to this Agreement and subsequent
transactions between Yahoo and ARTISTdirect and the method
of its release will be approved in advance of the release,
in writing, by both Yahoo and ARTISTdirect.
13.3 Nondisclosure Agreement. Yahoo and ARTISTdirect acknowledge
and agree that the terms of the Mutual Nondisclosure
Agreement attached as Exhibit U will be incorporated by
reference and made a part of this Agreement, and will
govern the use and disclosure of confidential information
and all discussions pertaining to or leading to this
Agreement.
13.4 User Data. All information and data provided to Yahoo by
users of the Yahoo Properties or otherwise collected by
Yahoo relating to user activity
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on the Yahoo Properties will be retained by and owned
solely by Yahoo. All information and data provided to
ARTISTdirect on the ARTISTdirect Network or otherwise
collected by ARTISTdirect relating to user activity on the
ARTISTdirect Network will be retained by and owned solely
by ARTISTdirect. Notwithstanding the foregoing, [***]* will
own all information and data provided to Yahoo by users who
participate in the Sweepstakes that Yahoo makes available
via the ARTISTdirect Sweepstakes Button and the
ARTISTdirect Sweepstakes Text Link. Each party agrees to
use information and data provided to it by a user only as
authorized by that user and will not disclose, sell,
license or otherwise transfer this information to any third
party or use this information for the transmission of "junk
mail," "spam" or any other unsolicited mass distribution of
information. With respect to information and data provided
by or collected from users in connection with the
ARTISTdirect RMI Site, the Yahoo Remote Merchant
Integration Program Agreement will govern the ownership and
use of such information and data by the parties.
13.5 Privacy of User Information. ARTISTdirect will (a) ensure
that all information provided by users of the ARTISTdirect
Network is maintained, accessed and transmitted in a secure
environment and in compliance with industry standard
security specifications and (b) provide a link to its
privacy policy regarding the protection of user data on
those Pages of the ARTISTdirect Network where the user is
requested to provide personal or financial information.
Further, ARTISTdirect represents and warrants that it has
reviewed the FTC Order and will not engage in any conduct
that it reasonably believes would cause Yahoo to violate
the FTC Order. ARTISTdirect agrees to follow and comply
with all reasonable instructions and directions of Yahoo to
ensure Yahoo's compliance with the FTC Order.
14. INDEMNIFICATION.
14.1 By ARTISTdirect. ARTISTdirect, at its own expense, will
indemnify, defend and hold harmless Yahoo and its
employees, representatives, agents and affiliates against
any claim, demand, action or other proceeding brought by
any third party against Yahoo to the extent that such
claim, demand, action or other proceeding is based on, or
arises out of, a claim that any ARTISTdirect Brand Feature,
ARTISTdirect Content, any material, product or service
produced, distributed, offered or sold by ARTISTdirect, or
any material presented on the ARTISTdirect Network or the
ARTISTdirect RMI Site (excluding any Yahoo graphic links
placed by ARTISTdirect in accordance with Section 8.6)
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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.
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(a) infringes in any manner any copyright, patent,
trademark, trade secret or any other intellectual
property right of any third party;
(b) is or contains any material or information that is
obscene, defamatory, libelous, slanderous, or that
violates any law or regulation;
(c) violates any rights of any person or entity, including
but not limited to rights of publicity, privacy or
personality;
(d) has resulted in any consumer fraud, product liability,
tort, breach of contract, injury, damage or harm of
any kind to any third party; or
(e) is subject to any fees, royalties, licenses or any
other payments to any third party;
provided, however, that in any such case: (1) Yahoo
provides ARTISTdirect with prompt written notice of any
such claim; (2) Yahoo permits ARTISTdirect to assume and
control the defense of such action or proceeding upon
ARTISTdirect's written notice to Yahoo of its intention to
indemnify; and (3) upon ARTISTdirect's written request, and
at no expense to Yahoo, Yahoo will provide ARTISTdirect
with all available information and assistance reasonably
necessary for ARTISTdirect to defend such claim.
ARTISTdirect will not enter into any settlement or
compromise of any such claim, which settlement or
compromise would result in any liability to Yahoo, without
Yahoo's prior written consent, which will not be
unreasonably withheld. ARTISTdirect will pay any and all
costs, damages and expenses, including but not limited to
reasonable attorneys' fees and costs awarded against or
otherwise incurred by Yahoo in connection with or arising
from any such claim, demand, action or other proceeding. It
is understood and agreed that Yahoo will not be required to
edit or review for accuracy or appropriateness any content
provided by ARTISTdirect.
14.2 By Yahoo. Yahoo, at its own expense, will indemnify, defend
and hold harmless ARTISTdirect and its employees,
representatives, agents and affiliates against any claim,
demand, action or other proceeding brought by any third
party against ARTISTdirect to the extent that such claim,
demand, action or other proceeding is based on, or arises
out of, a claim that any Yahoo Brand Feature
(a) infringes in any manner any copyright, patent,
trademark, trade secret or any other intellectual
property right of any third party;
(b) is or contains any material or information that is
obscene, defamatory, libelous, slanderous, or that
violates any law or regulation;
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(c) violates any rights of any person or entity, including
but not limited to rights of publicity, privacy or
personality;
(d) has resulted in any consumer fraud, product liability,
tort, breach of contract, injury, damage or harm of
any kind to any third party; or
(e) is subject to any fees, royalties, licenses or any
other payments to any third party;
provided, however, that in any such case: (1) ARTISTdirect
provides Yahoo with prompt written notice of any such
claim; (2) ARTISTdirect permits Yahoo to assume and
control the defense of such action or proceeding upon
Yahoo's written notice to ARTISTdirect of its intention to
indemnify; and (3) upon Yahoo's written request, and at no
expense to ARTISTdirect, ARTISTdirect will provide Yahoo
with all available information and assistance reasonably
necessary for Yahoo to defend such claim. Yahoo will not
enter into any settlement or compromise of any such claim,
which settlement or compromise would result in any
liability to ARTISTdirect, without ARTISTdirect's prior
written consent, which will not be unreasonably withheld.
Yahoo will pay any and all costs, damages and expenses,
including but not limited to reasonable attorneys' fees
and costs awarded against or otherwise incurred by
ARTISTdirect in connection with or arising from any such
claim, demand, action or other proceeding.
15. LIMITATION OF LIABILITY.
EXCEPT AS PROVIDED IN SECTION 14, UNDER NO CIRCUMSTANCES WILL
ARTISTDIRECT, YAHOO OR ANY AFFILIATE OF EITHER PARTY BE LIABLE TO
THE OTHER PARTY FOR INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL
OR EXEMPLARY DAMAGES ARISING FROM THIS AGREEMENT, EVEN IF THAT
PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES,
INCLUDING BUT NOT LIMITED TO LOSS OF REVENUE OR ANTICIPATED
PROFITS OR LOST BUSINESS.
16. INSURANCE.
ARTISTdirect will maintain insurance during the Term with a
carrier that is reasonably acceptable to Yahoo and with coverage
for commercial general liability and errors and omissions of at
least $1 million per occurrence. ARTISTdirect will name Yahoo as
an additional insured on such insurance and will provide evidence
of such insurance to Yahoo within 10 days of the Effective Date.
Such insurance policy will not be cancelled or modified in a
manner inconsistent with this provision without Yahoo's prior
written consent.
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17. GENERAL PROVISIONS.
17.1 Independent Contractors. It is the intention of Yahoo and
ARTISTdirect that Yahoo and ARTISTdirect are, and will be
deemed to be, independent contractors with respect to the
subject matter of this Agreement, and nothing contained in
this Agreement will be deemed or construed in any manner
whatsoever as creating any partnership, joint venture,
employment, agency, fiduciary or other similar relationship
between Yahoo and ARTISTdirect.
17.2 Entire Agreement. This Agreement, and all Exhibits attached
hereto, represents the entire agreement between Yahoo and
ARTISTdirect with respect to the subject matter hereof and
thereof and will supersede all prior agreements and
communications of the parties, oral or written, including
but not limited to the Letter of Understanding executed on
or about December 1, 1999 between Yahoo and ARTISTdirect.
17.3 Amendment and Waiver. No amendment to, or waiver of, any
provision of this Agreement will be effective unless in
writing and signed by both parties. The waiver by any party
of any breach or default will not constitute a waiver of
any different or subsequent breach or default.
17.4 Governing Law. This Agreement will be governed by and
interpreted in accordance with the laws of the State of
California without regard to the conflicts of laws
principles thereof.
17.5 Successors and Assigns. Neither party will assign its
rights or obligations under this Agreement without the
prior written consent of the other party, which will not
unreasonably be withheld or delayed. Notwithstanding the
foregoing, either party may assign this Agreement to an
entity that acquires substantially all of the stock or
assets of a party to this Agreement, except that consent
will be required if the non-assigning party reasonably
determines that the assignee will not have sufficient
capital or assets to perform its obligations hereunder, or
that the assignee is a direct competitor of the
non-assigning party. All terms and provisions of this
Agreement will be binding upon and inure to the benefit of
the parties hereto and their respective permitted
transferees, successors and assigns.
17.6 Force Majeure. Neither party will be liable for failure to
perform or delay in performing any obligation (other than
the payment of money) under this Agreement if such failure
or delay is due to fire, flood, earthquake, strike, war
(declared or undeclared), embargo, blockade, legal
prohibition, governmental action, riot, insurrection,
damage, destruction or any other similar cause beyond the
control of such party. If such event continues for more
than 30 days, the other party may terminate this Agreement
without further obligation.
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17.7 Notices. Any notice, request or other communication called
for by this Agreement will be (a) in writing; (b) sent by
overnight or certified mail return receipt requested; and
(c) deemed delivered to the party to whom such
communication is directed, if by overnight mail, on the
date delivered or, if by certified mail, 2 days following
the date sent. If to Yahoo, such notices will be addressed
to 3420 Central Expressway, Santa Clara, CA 95051, Fax:
(408) 731-3301 Attention: Senior Vice President, Sales,
with a copy to its General Counsel. If to ARTISTdirect,
such notices will be addressed to 17835 Ventura Boulevard,
Suite 310, Encino, CA 91316 Attention: Chief Operating
Officer, with a copy to its counsel, Lenard & Gonzalez LLP,
1900 Avenue of the Stars, 25th Floor, Los Angeles, CA
90067, Attention: Allen D. Lenard, Esq.
17.8 Severability. If any provision of this Agreement is held to
be invalid, illegal or unenforceable for any reason, such
invalidity, illegality or unenforceability will not effect
any other provisions of this Agreement, and this Agreement
will be construed as if such invalid, illegal or
unenforceable provision had never been contained herein.
17.9 Sole Responsibility. ARTISTdirect will remain solely
responsible for the operation of the ARTISTdirect Network,
and Yahoo will remain solely responsible for the operation
of Yahoo's principal U.S. targeted Web site (the "Yahoo
Site"). Each party (a) acknowledges that the ARTISTdirect
Network and the Yahoo Site may be subject to temporary
shutdowns due to causes beyond the operating party's
reasonable control and (b) subject to the terms of this
Agreement, retains sole right and control over the
programming, content and conduct of transactions over its
respective internet-based service.
17.10 Counterparts. This Agreement may be executed in two
counterparts, both of which taken together will constitute
a single instrument. Execution and delivery of this
Agreement may be evidenced by facsimile transmission.
17.11 Authority. Each of Yahoo and ARTISTdirect represents and
warrants that the negotiation and entry of this Agreement
will not violate, conflict with, interfere with, result in
a breach of, or constitute a default under any other
agreement to which they are a party.
17.12 Attorneys Fees. The prevailing party in any action to
enforce this Agreement will be entitled to reimbursement of
its expenses, including reasonable attorneys' fees.
[SIGNATURE PAGE FOLLOWS]
22
<PAGE> 23
This Advertising and Promotion Agreement has been executed by the
duly authorized representatives of the parties, effective as of the Effective
Date.
YAHOO! INC. ARTISTDIRECT, INC.
By: /s/ ANIL SINGH By: /s/ KEITH YOKOMOTO
--------------------------------- ----------------------------------
Name: Anil Singh Name: Keith Yokomoto
-------------------------------- --------------------------------
Title: Senior Vice President Title: President and COO
------------------------------- -------------------------------
Attn: Senior Vice President, Sales Attn: Chief Operating Officer
3420 Central Expressway
Santa Clara, CA 95051
Tel.: (408) 731-3300 Tel: (818) 758-8700
Fax: (408) 731-3301 Fax: (818) 758-8722
e-mail: Singh@yahoo-inc.com e-mail: Keith@artistdirect.com
23
<PAGE> 24
EXHIBIT T
FTC DECISION AND ORDER
9823015
B251544
UNITED STATES OF AMERICA
FEDERAL TRADE COMMISSION
COMMISSIONERS:
ROBERT PITOFSKY, CHAIRMAN
SHEILA F. ANTHONY
MOZELLE W. THOMPSON
ORSON SWINDLE
IN THE MATTER OF
GEOCITIES, A CORPORATION.
DOCKET NO. C-3850
DECISION AND ORDER
The Federal Trade Commission having initiated an investigation of certain acts
and practices of the respondent named in the caption hereof, and the respondent
having been furnished thereafter with a copy of a draft of complaint which the
Bureau of Consumer Protection proposed to present to the Commission for its
consideration and which, if issued by the Commission, would charge respondent
with violation of the Federal Trade Commission Act; and
The respondent, its attorneys, and counsel for Federal Trade Commission having
thereafter executed an agreement containing a consent order, an admission by the
respondent of all the jurisdictional facts set forth in the aforesaid draft of
complaint, a statement that the signing of said agreement is for settlement
purposes only and does not constitute an admission by respondent that the law
has been violated as alleged in such complaint, or that the facts as alleged in
such complaint, other than jurisdictional facts, are true and waivers and other
provisions as required by the Commission's Rules; and
The Commission having considered the matter and having determined that it had
reason to believe that the respondent has violated the said Act, and that
complaint should issue stating its charges in that respect, and having thereupon
accepted the executed consent agreement and placed such agreement on the public
record for a period of sixty (60) days, and having duly considered the comments
filed thereafter by interested persons pursuant to Section 2.34 of its Rules,
now in further conformity with the procedure prescribed in Section 2.34 of its
Rules, the Commission hereby issues its complaint, makes the following
jurisdictional findings and enters the following order:
1. Respondent GeoCities, is a corporation organized, existing, and doing
business under and by virtue of the laws of the State of California, with
its office or principal place of business located at 1918 Main Street, Suite
300, Santa Monica, California 90405.
2. The Federal Trade Commission has jurisdiction of the subject matter of
this proceeding and of the respondent, and the proceeding is in the
proceeding is in the public interest.
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ORDER
DEFINITIONS
For purposes of this order, the following definitions shall apply:
1. "Child" or "children" shall mean a person of age twelve (12) or under.
2. "Parents" or "parental" shall mean a legal guardian, including, but not
limited to, a biological or adoptive parent.
3. "Personal identifying information" shall include, but is not limited to,
first and last name, home or other physical address (e.g., school), e-mail
address, telephone number, or any information that identifies a specific
individual, or any information which when tied to the above becomes
identifiable to a specific individual.
4. "Disclosure" or "disclosed to third party(ies)" shall mean (a) the
release of information in personally identifiable form to any other
individual, firm, or organization for any purpose or (b) making publicly
available such information by any means including, but not limited to,
public posting on or through home pages, pen pal services, e-mail services,
message boards, or chat rooms.
5. "Clear(ly) and prominent(ly)" shall mean in a type size and location that
are not obscured by any distracting elements and are sufficiently noticeable
for an ordinary consumer to read and comprehend, and in a typeface that
contrasts with the background against which it appears.
6. "Archived" database shall mean respondent's off-site "back-up" computer
tapes containing member profile information and GeoCities Web site
information.
7. "Electronically verifiable signature" shall mean a digital signature or
other electronic means that ensures a valid consent by requiring: (1)
authentication (guarantee that the message has come from the person who
claims to have sent it); (2) integrity (proof that the message contents have
not been altered, deliberately or accidentally, during transmission); and
(3) non-repudiation (certainty that the sender of the message cannot later
deny sending it).
8. "Express parental consent" shall mean a parent's affirmative agreement
that is obtained by any of the following means: (1) a signed statement
transmitted by postal mail or facsimile; (2) authorizing a charge to a
credit card via a secure server; (3) e-mail accompanied by an electronically
verifiable signature; (4) a procedure that is specifically authorized by
statute, regulation, or guideline issued by the Commission; or (5) such
other procedure that ensures verified parental consent and ensures the
identity of the parent, such as the use of a reliable certifying authority.
9. Unless otherwise specified, "respondent" shall mean GeoCities, its
successors and assigns and its officers, agents, representatives, and
employees.
10. "Commerce" shall mean as defined in Section 4 of the Federal Trade
Commission Act, 15 U.S.C. Section 44.
I.
IT IS ORDERED that respondent, directly or through any corporation, subsidiary,
division, or other device, in connection with any online collection of personal
identifying information from consumers, in or affecting commerce, shall not make
any misrepresentation, in any manner, expressly or by
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implication, about its collection or use of such information from or about
consumers, including, but not limited to, what information will be disclosed to
third parties and how the information will be used.
II.
IT IS FURTHER ORDERED that respondent, directly or through any corporation,
subsidiary, division, or other device, in connection with any online collection
of personal identifying information from consumers, in or affecting commerce,
shall not misrepresent, in any manner, expressly or by implication, the identity
of the party collecting any such information or the sponsorship of any activity
on its Web site.
III.
IT IS FURTHER ORDERED that respondent, directly or through any corporation,
subsidiary, division, or other device, in connection with the online collection
of personal identifying information from children, in or affecting commerce,
shall not collect personal identifying information from any child if respondent
has actual knowledge that such child does not have his or her parent's
permission to provide the information to respondent. Respondent shall not be
deemed to have actual knowledge if the child has falsely represented that (s)he
is not a child and respondent does not knowingly possess information that such
representation is false.
IV.
IT IS FURTHER ORDERED that respondent, directly or through any corporation,
subsidiary, division, or other device, in connection with the online collection
of personal identifying information, in or affecting commerce, shall provide
clear and prominent notice to consumers, including the parents of children, with
respect to respondent's practices with regard to its collection and use of
personal identifying information. Such notice shall include, but is not limited
to, disclosure of:
A. what information is being collected (e.g., "name," "home address,"
"e-mail address," "age," "interests");
B. its intended use(s);
C. the third parties to whom it will be disclosed (e.g., "advertisers of
consumer products," mailing list companies," "the general public");
D. the consumer's ability to obtain access to or directly access such
information and the means by which (s)he may do so;
E. the consumer's ability to remove directly or have the information removed
from respondent's databases and the means by which (s)he may do so; and
F. the procedures to delete personal identifying information from
respondent's databases and any limitations related to such deletion.
Such notice shall appear on the home page of respondent's Web site(s) and at
each location on the site(s) at which such information is collected.
Provided that, respondent shall not be required to include the notice at the
locations at which information is collected if such information is limited to
tracking information and the collection of such information is described in the
notice required by this Part.
Provided further that, for purposes of this Part, compliance with all of the
following shall be deemed adequate notice: (a) placement of a clear and
prominent hyperlink or button labeled PRIVACY NOTICE on the home page(s), which
directly links to the privacy notice screen(s); (b) placement of the information
required in this Part clearly and prominently on the privacy notice screen(s),
followed on the same screen(s) with a button that must be clicked on to make it
disappear; and (c) at each
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location on the site at which any personal identifying information is collected,
placement of a clear and prominent hyperlink on the initial screen on which the
collection takes place, which links directly to the privacy notice and which is
accompanied by the following statement in bold typeface: NOTICE: WE COLLECT
PERSONAL INFORMATION ON THIS SITE. TO LEARN MORE ABOUT HOW WE USE YOUR
INFORMATION CLICK HERE.
V.
IT IS FURTHER ORDERED that respondent, directly or through any corporation,
subsidiary, division, or other device, in connection with the online collection
of personal identifying information from children, in or affecting commerce,
shall maintain a procedure by which it obtains express parental consent prior to
collecting and using such information.
Provided that, respondent may implement the following screening procedure that
shall be deemed to be in compliance with this Part. Respondent shall collect and
retain certain personal identifying information from a child, including birth
date and the child's and parent's e-mail addresses (hereafter "screening
information"), enabling respondent to identify the site visitor as a child and
to block the child's attempt to register with respondent without express
parental consent. If respondent elects to have the child register with it,
respondent shall: (1) give notice to the child to have his/her parent provide
express parental consent to register; and/or (2) send a notice to the parent's
e-mail address for the purpose of obtaining express parental consent. The notice
to the child or parent shall provide instructions for the parent to: (1) go to a
specific URL on the Web site to receive information on respondent's practices
regarding its collection and use of personal identifying information from
children and (2) provide express parental consent for the collection and use of
such information. Respondent's collection of screening information shall be by a
manner that discourages children from providing personal identifying information
in addition to the screening information. All personal identifying information
collected from a child shall be held by respondent in a secure manner and shall
not be used in any manner other than to effectuate the notice to the child or
parent, or to block the child from further attempts to register or otherwise
provide personal identifying information to respondent without express parental
consent. The personal identifying information collected shall not be disclosed
to any third party prior to the receipt of express parental consent. If express
parental consent is not received by twenty (20) days after respondent's
collection of the information from the child, respondent shall remove all such
personal identifying information from its databases, except such screening
information necessary to block the child from further attempts to register or
otherwise provide personal identifying information to respondent without express
parental consent.
VI.
Nothing in this order shall prohibit respondent from collecting personal
identifying information from children or from using such information, as
specifically permitted in the Children's Online Privacy Protection Act of 1998
(without regard to the effective date of the Act) or as such Act may hereafter
be amended; regulations or guides promulgated by the Commission; or
self-regulatory guidelines approved by the Commission pursuant to the Act.
VII.
IT IS FURTHER ORDERED that respondent GeoCities, and its successors and assigns,
shall provide a reasonable means for consumers, including the parents of
children, to obtain removal of their or their children's personal identifying
information collected and retained by respondent and/or disclosed to third
parties, prior to the date of service of this order, as follows:
A. Respondent shall provide a clear and prominent notice to each consumer over
the age of twelve (12) from whom it collected personal identifying information
and disclosed that information to CMG Information Services, Inc., describing
such consumer's options as stated in Part VI.C and the manner in which (s)he may
exercise them.
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B. Respondent shall provide a clear and prominent notice to the parent of each
child from whom it collected personal identifying information prior to May 20,
1998, describing the parent's options as stated in Part VI.C and the manner in
which (s)he may exercise them.
C. Respondent shall provide the notice within thirty (30) days after the date of
service of this order by e-mail, postal mail, or facsimile. Notice to the parent
of a child may be to the e-mail address of the parent and, if not known by
respondent, to the e-mail address of the child. The notice shall include the
following information:
1. the information that was collected (e.g., "name," "home address," "e-mail
address," "age," "interests"); its use(s) and/or intended use(s); and the
third parties to whom it was or will be disclosed (e.g., "advertisers of
consumer products," "mailing list companies," "the general public") and with
respect to children, that the child's personal identifying information may
have been made public through various means, such as by publicly posting on
the child's personal home page or disclosure by the child through the use of
an e-mail account;
2. the consumer's and child's parents' right to obtain access to such
information and the means by which (s)he may do so;
3. the consumer's and child's parents' right to have the information removed
from respondent's or a third party's databases and the means by which (s)he
may do so;
4. a statement that childrens information will not be disclosed to third
parties, including public posting, without express parental consent to the
disclosure or public posting;
5. the means by which express parental consent may be communicated to the
respondent permitting disclosure to third parties of a child's information;
and
6. a statement that the failure of a consumer over the age of twelve (12) to
request removal of the information from respondent's databases will be
deemed as approval to its continued retention and/or disclosure to third
parties by respondent.
D. Respondent shall provide to consumers, including the parents of children, a
reasonable and secure means to request access to or directly access their or
their children's personal identifying information. Such means may include direct
access through password protected personal profile, return e-mail bearing an
electronically verifiable signature, postal mail, or facsimile.
E. Respondent shall provide to consumers, including the parents of children, a
reasonable means to request removal of their or their children's personal
identifying information from respondent's and/or the applicable third party's
databases or an assurance that such information has been removed. Such means may
include e-mail, postal mail, or facsimile.
F. The failure of a consumer over the age of twelve (12) to request the actions
specified above within twenty (20) days after his/her receipt of the notice
required in Part VI.A shall be deemed to be consent to the information's
continued retention and use by respondent and any third party.
G. Respondent shall provide to the parent of a child a reasonable means to
communicate express parental consent to the retention and/or disclosure to third
parties of his/her child's
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personal identifying information. Respondent shall not use any such information
or disclose it to any third party unless and until it receives express parental
consent.
H. If, in response to the notice required in Part VI.A, respondent has received
a request by a consumer over the age of twelve (12) that respondent should
remove from its databases the consumer's personal identifying information or has
not received the express consent of a parent of a child to the continued
retention and/or disclosure to third parties of a child's personal identifying
information by respondent within twenty (20) days after the parent's receipt of
the notice required in Part VI.B, respondent shall within ten (10) days:
1. Discontinue its retention and/or disclosure to third parties of such
information, including but not limited to (a) removing from its databases
all such information, (b) removing all personal home pages created by the
child, and (c) terminating all e-mail accounts for the child; and
2. Contact all third parties to whom respondent has disclosed the
information, requesting that they discontinue using or disclosing that
information to other third parties, and remove the information from their
databases.
With respect to any consumer over the age of twelve (12) or any parent of a
child who has consented to respondent's continued retention and use of
personal identifying information pursuant to this Part, such consumer's or
parent's continuing right to obtain access to his/her or a child's personal
identifying information or removal of such information from respondent's
databases shall be as specified in the notice required by Part IV of this
order.
I. Within thirty (30) days after the date of service of this order, respondent
shall obtain from a responsible official of each third party to whom it has
disclosed personal identifying information and from each GeoCities Community
Leader a statement stating that (s)he has been advised of the terms of this
order and of respondent's obligations under this Part, and that (s)he agrees,
upon notification from respondent, to discontinue using or disclosing a
consumer's or child's personal identifying information to other third parties
and to remove any such information from its databases.
J. As may be permitted by law, respondent shall cease to do business with any
third party that fails within thirty (30) days of the date of service of this
order to provide the statement set forth in Part VI.I or whom respondent knows
or has reason to know has failed at any time to (a) discontinue using or
disclosing a child's personal identifying information to other third parties, or
(b) remove any such information from their databases. With respect to any
GeoCities Community Leader, the respondent shall cease the Community Leader
status of any person who fails to provide the statement set forth in Part VI.I
or whom respondent knows or has reason to know has failed at any time to (a)
discontinue using or disclosing a child's personal identifying information to
other third parties, or (b) remove any such information from their databases.
For purposes of this Part: "third party(ies)" shall mean each GeoCities
Community Leader, CMG Information Services, Inc., Surplus Software, Inc.
(Surplus Direct/Egghead Computer), Sage Enterprises, Inc. (GeoPlanet/Planetall),
Netopia, Inc. (Netopia), and InfoBeat/Mercury Mail (InfoBeat).
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VIII.
IT IS FURTHER ORDERED that for the purposes of this order, respondent shall not
be required to remove personal identifying information from its archived
database if such information is retained solely for the purposes of Web site
system maintenance, computer file back-up, to block a child's attempt to
register with or otherwise provide personal identifying information to
respondent without express parental consent, or to respond to requests for such
information from law enforcement agencies or pursuant to judicial process.
Except as necessary to respond to requests from law enforcement agencies or
pursuant to judicial process, respondent shall not disclose to any third party
any information retained in its archived database. In any notice required by
this order, respondent shall include information, clearly and prominently, about
its policies for retaining information in its archived database.
IX.
IT IS FURTHER ORDERED that for five (5) years after the date of this order,
respondent GeoCities, and its successors and assigns, shall place a clear and
prominent hyperlink within its privacy statement which states as follows in bold
typeface:
NOTICE: CLICK HERE FOR IMPORTANT INFORMATION ABOUT SAFE SURFING FROM THE FEDERAL
TRADE COMMISSION.
The hyperlink shall directly link to a hyperlink/URL to be provided to
respondent by the Commission. The Commission may change the hyperlink/URL upon
thirty (30) days prior written notice to respondent.
X.
IT IS FURTHER ORDERED that respondent GeoCities, and its successors and assigns,
shall maintain and upon request make available to the Federal Trade Commission
for inspection and copying the following:
A. For five (5) years after the last date of dissemination of a notice
required by this order, a print or electronic copy in HTML format of all
documents relating to compliance with Parts IV through VIII of this order,
including, but not limited to, a sample copy of every information collection
form, Web page, screen, or document containing any representation regarding
respondent's information collection and use practices, the notice required
by Parts IV through VI, any communication to third parties required by Part
VI, and every Web page or screen linking to the Federal Trade Commission Web
site. Each Web page copy shall be accompanied by the URL of the Web page
where the material was posted online. Electronic copies shall include all
text and graphics files, audio scripts, and other computer files used in
presenting information on the World Wide Web; and
Provided that, after creation of any Web page or screen in compliance with this
order, respondent shall not be required to retain a print or electronic copy of
any amended Web page or screen to the extent that the amendment does not affect
respondent's compliance obligations under this order.
B. For five (5) years after the last collection of personal identifying
information from a child, all materials evidencing the express parental
consent given to respondent.
XI.
IT IS FURTHER ORDERED that respondent GeoCities, and its successors and assigns,
shall deliver a copy of this order to all current and future principals,
officers, directors, and managers, and to all current and future employees,
agents, and representatives having responsibilities with respect to the subject
matter of this order. Respondent shall deliver this order to current personnel
within thirty (30) days after the date of service of this order, and to future
personnel within thirty (30) days after the person assumes such position or
responsibilities.
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XII.
IT IS FURTHER ORDERED that respondent GeoCities, and its successors and assigns,
shall establish an "information practices training program" for any employee or
GeoCities Community Leader engaged in the collection or disclosure to third
parties of consumers' personal identifying information. The program shall
include training about respondent's privacy policies, information security
procedures, and disciplinary procedures for violations of its privacy policies.
Respondent shall provide each such current employee and GeoCities Community
Leader with information practices training materials within thirty (30) days
after the date of service of this order, and each such future employee or
GeoCities Community Leader such materials and training within thirty (30) days
after (s)he assumes his/her position or responsibilities.
XIII.
IT IS FURTHER ORDERED that respondent GeoCities, and its successors and assigns,
shall notify the Commission at least thirty (30) days prior to any change in the
corporation that may affect compliance obligations arising under this order,
including, but not limited to, a dissolution, assignment, sale, merger, or other
action that would result in the emergence of a successor corporation; the
creation or dissolution of a subsidiary, parent, or affiliate that engages in
any acts or practices subject to this order; the proposed filing of a bankruptcy
petition; or a change in the corporate name or address. Provided, however, that,
with respect to any proposed change in the corporation about which respondent
learns less than thirty (30) days prior to the date such action is to take
place, respondent shall notify the Commission as soon as is practicable after
obtaining such knowledge. All notices required by this Part shall be sent by
certified mail to the Associate Director, Division of Enforcement, Bureau of
Consumer Protection, Federal Trade Commission, Washington, D.C. 20580.
XIV.
IT IS FURTHER ORDERED that respondent GeoCities, and its successors and assigns,
shall, within sixty (60) days after service of this order, and at such other
times as the Federal Trade Commission may require, file with the Commission a
report, in writing, setting forth in detail the manner and form in which they
have complied with this order.
XV.
This order will terminate on February 5, 2019, or twenty (20) years from the
most recent date that the United States or the Federal Trade Commission files a
complaint (with or without an accompanying consent decree) in federal court
alleging any violation of the order, whichever comes later; provided, however,
that the filing of such a complaint will not affect the duration of:
A. Any Part in this order that terminates in less than twenty (20) years;
B. This order's application to any respondent that is not named as a
defendant in such complaint; and
C. This order if such complaint is filed after the order has terminated
pursuant to this Part.
Provided, further, that if such complaint is dismissed or a federal court rules
that the respondent did not violate any provision of the order, and the
dismissal or ruling is either not appealed or upheld on appeal, then the order
will terminate according to this Part as though the complaint had never been
filed, except that the order will not terminate between the date such complaint
is filed and the later of the deadline for appealing such dismissal or ruling
and the date such dismissal or ruling is upheld on appeal.
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By the Commission.
Donald S. Clark
Secretary
ISSUED: February 5, 1999
SEAL
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<PAGE> 33
EXHIBIT U
MUTUAL NONDISCLOSURE AGREEMENT
1. "Confidential Information" is that confidential, proprietary, and trade
secret information being disclosed by the disclosing party pursuant to this
Agreement.
2. Except as set forth in this Section 2, all Confidential Information shall be
in tangible form and shall be marked as Confidential or proprietary
information of the disclosing party. If the Confidential Information is
disclosed orally or visually, it shall be identified as such at the time of
disclosure and confirmed in a writing to the recipient within thirty (30)
days of such disclosure.
3. Each of the parties agrees that it will not make use of, disseminate, or in
any way disclose any Confidential Information of the other party to any
person, firm or business, except to the extent necessary for negotiations,
discussions, and consultations with personnel or authorized representatives
of the other party and any purpose the other party may hereafter authorize
in writing. Each of the parties agrees that it shall disclose Confidential
Information of the other party only to those of its employees, consultants,
advisors and investors who need to know such information and who have
previously agreed, either as a condition to employment or in order to obtain
the Confidential Information, to be bound by terms and conditions
substantially similar to those of this Agreement.
4. There shall be no liability for disclosure or use of Confidential
Information which is (a) in the public domain through no fault of the
receiving party (b) rightfully received from a third party without any
obligation of confidentiality, (c) rightfully known to the receiving party
without any limitation on use or disclosure prior to its receipt from the
disclosing party, (d) independently developed by the receiving party without
use of any Confidential Information and by persons who have not had access
to any Confidential Information (e) generally made available to third
parties without any restriction on disclosure, or (f) communicated in
response to a valid order by a court or other governmental body, as
otherwise required by law, or as necessary to establish the rights of either
party under this Agreement (provided that the party so disclosing has
provided the other party with a reasonable opportunity to seek protective
legal treatment for such Confidential Information).
5. Each of the parties agrees that it shall treat all Confidential Information
of the other party with the same degree of care as it accords to its own
Confidential Information, and each of the parties represents that it
exercises reasonable care to protect its own Confidential Information.
6. Each of the parties agrees that it will not modify, reverse engineer,
decompile, create other works from, or disassemble any software programs
contained in the Confidential Information of the other party unless
otherwise specified in writing by the disclosing party.
7. All materials (including, without limitation, documents, drawings, models,
apparatus, sketches, designs and lists) furnished to one party by the other,
and which are designated in writing to be the property of such party, shall
remain the property of such party and shall be returned to it promptly at
its request, together with any copies thereof.
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8. This Agreement shall govern all communications between the parties that are
made during the period from the effective date of this Agreement to the date
on which either party receives from the other written notice that subsequent
communications shall not be so governed, provided, however, that each
party's obligations under Sections 2 and 3 with respect to Confidential
Information of the other party which it has previously received shall
continue unless and until such Confidential Information falls within Section
4. Neither party shall communicate any information to the other in violation
of the proprietary rights of any third party. Neither party acquires any
licenses under any intellectual property rights of the other party under
this Agreement.
xi