Remote Merchant Integration Program Agreement - Yahoo! Inc. and ARTISTdirect Inc.
YAHOO! REMOTE MERCHANT INTEGRATION (RMI) PROGRAM AGREEMENT
THIS RMI AGREEMENT (the " RMI Agreement") is made as of this 24th day of
December, 1999 (the "Effective Date") between YAHOO! INC. ("Yahoo!"), a Delaware
corporation, and ARTISTdirect, Inc. ("Merchant"), a Delaware corporation. In
consideration of the mutual promises contained herein, the parties agree as
follows:
1. MERCHANT PRODUCT INFORMATION. Merchant will provide to Yahoo!, or will
permit Yahoo! to download, information relating to Merchant products in
accordance with Yahoo!'s technical and formatting specifications. Such
information will include without limitation a Merchant identifier, product
name, product description, product price, URL for the Web page on the
Merchant Network (as defined below) that features the product, URL for the
Web page on the Merchant Network that contains the product image and, if
applicable, any warranty notices or disclaimers, product availability,
return information, sizes, colors, SKU numbers, Web pages and graphic files,
including but not limited to graphical brand features of Merchant
(collectively referred to as "Merchant Product Information"). Merchant
agrees to update all Merchant Product Information in accordance with
Yahoo!'s technical and formatting specifications and in a timely manner that
is mutually agreed upon by the parties. If Merchant provides Merchant
Product Information to Yahoo! on or about the Effective Date of this RMI
Agreement, Yahoo! will host Merchant Product Information on Yahoo! servers
and include Merchant Product Information in Yahoo!'s U.S. based on-line
shopping property (referred to as "Yahoo! Shopping" or the "Service") within
forty-five (45) days after the Effective Date of this RMI Agreement. If
Merchant does not provide Merchant Product Information to Yahoo! on or about
the Effective Date of this RMI Agreement, the parties will use commercially
reasonable efforts to include Merchant Production Information in Yahoo!
Shopping as soon as possible, but no sooner than forty-five (45) days after
the Effective Date of this RMI Agreement. Yahoo! is solely responsible for
the design, layout, posting and maintenance of Yahoo! Shopping.
2. MERCHANT PAGES. Merchant will permit Yahoo! to download and display, via a
"Proxy Server" or other means, Web pages from the Web sites that comprise
the network operated by or for Merchant (the "Merchant Network"), currently
located at http://www.artistdirect.com. The parties will use commercially
reasonable efforts to isolate and include in the Service only those Web
sites on the Merchant Network that sell products on-line, including but not
limited to the Web site currently located at
http://www.ubl.com/fp.asp?layout=front_page and any Web site that sells
products on-line relating to a particular recording artist (e.g.,
www.beckdirect.com). Web pages from the Merchant Network, as displayed by
Yahoo! in accordance with this RMI Agreement, are referred to as "Merchant
Pages." Within forty-five (45) days after the Effective Date of this RMI
Agreement, Yahoo! will host Merchant Pages on Yahoo! servers and include
Merchant Pages in Yahoo! Shopping.
3. RESPONSIBILITIES AND RIGHTS WITH RESPECT TO MERCHANT PRODUCT INFORMATION AND
MERCHANT PAGES. In the event that Yahoo! becomes aware of a potential
violation of law or a conflict with Yahoo!'s advertising guidelines arising
from any hypertext links or third party advertising included in the Merchant
Pages, Yahoo! will notify Merchant and may request that Merchant remove or
replace such hypertext links or third party advertising on Merchant Pages.
If the parties cannot resolve the matter within three (3) business days of
Yahoo!'s notice to Merchant, Yahoo! reserves the right to remove or disable
such hypertext links or third party advertising on Merchant Pages. The
foregoing only applies to Merchant Pages and does not affect operation of
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or any material on the Merchant Network.
4. CUSTOMER ORDER INFORMATION.
(a) ORDER PLACEMENT AND FULFILLMENT. Users of Yahoo! Shopping may search
for and navigate to Merchant Product Information and Merchant Pages via
Yahoo! Shopping pages designed and hosted by Yahoo!. Users of Yahoo!
Shopping will order items to be purchased from Merchant via Merchant
Pages. Check-out for orders also will be conducted on Merchant Pages
(the "Check-out Pages"). Information relating to the purchase of
Merchant products via the Service, including product name, product
quantity, amount paid, user's proper name, shipping address, billing
address, email address and credit card information ("Customer Order
Information") will be transmitted to Merchant. Merchant will notify
each user via email within twenty-four (24) hours after Merchant
receives the Customer Order Information whether the order can or cannot
be fulfilled. Merchant will be solely responsible for all products
offered by Merchant on Yahoo! Shopping and all activities related to
such products, including without limitation billing, shipping and
fulfillment of goods, returns and customer service and for any acts or
omissions that occur in connection with such product offerings. During
the Term (as defined below), if Merchant intends to modify the
Check-out Pages or otherwise redesign the Merchant Network, Merchant
will provide Yahoo! with (i) at least three (3) business days written
notice prior to implementing such modification or redesign, unless such
modification or redesign is necessary to avoid liability for third
party claims, and (ii) reasonable technical assistance, as Yahoo! may
reasonably request, to ensure that the Service will be uninterrupted.
Merchant acknowledges that Merchant's failure to provide Yahoo! with at
least three (3) business days notice prior to implementing such
modification or redesign may adversely affect operation of Merchant
Pages, including but not limited to Check-out Pages, and users' ability
to search for and navigate to Merchant Production Information and
Merchant Pages.
(b) PRIVACY AND CONSUMER PROTECTION. Merchant agrees to implement adequate
security protections to ensure the privacy of Customer Order
Information. Merchant further agrees (i) to post a privacy policy on
the Merchant Network that, at a minimum, discloses any and all uses of
personal information collected from users by Merchant, including but
not limited to any uses of personal information collected during a
transaction that is cancelled or otherwise not completed by the user;
(ii) to place a prominent notice on any Check-out Pages on which
Merchant collects personal information from users that such information
is being collected; (iii) to provide a hypertext link on all Check-out
Pages to Merchant's privacy policy; and (iv) to use Customer Order
Information only as expressly permitted by Merchant's privacy policy.
If a user requests, or if Yahoo! conveys such request on behalf of the
user, that Merchant remove personal information relating to any user
from Merchant's database and other records, Merchant agrees to remove
such information promptly from its database or other records.
5. INFORMATION MAINTAINED BY YAHOO! AND RELEVANT TO THE TRANSACTION. In the
event that a registered Yahoo! user places an order for a Merchant product
via the Service, Yahoo! already may maintain information about the user in
Yahoo!'s proprietary databases that is relevant to the transaction,
including but not limited to that user's proper name, shipping address,
billing address, email address and credit card information. Merchant
acknowledges that Yahoo! may give registered Yahoo! users the option to have
certain input fields on Check-out Pages that
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request Customer Order Information "populated" with applicable information
about that registered Yahoo! user from Yahoo!'s proprietary databases. For
clarity, the parties understand that such "population" by Yahoo! will not
affect Merchant's ownership of Customer Order Information, as set forth in
Section 7(c), and will not transfer, impair or otherwise limit Yahoo!'s
rights in the "populated" information.
6. REGISTRATION OF UNREGISTERED YAHOO! USERS WHO PURCHASE FROM MERCHANT VIA THE
SERVICE. Merchant agrees that users who are not registered with Yahoo! may
be given the opportunity to register with Yahoo! before completing a
discrete transaction with Merchant via the Service; provided, however, that
(a) such opportunity to register may be presented during the check-out
process for the underlying transaction only to the extent that Yahoo! places
a hypertext link to its registration page in the Yahoo! branded toolbar on
Merchant Pages, unless otherwise mutually agreed upon by the parties, and
(b) there will be no obligation to register. The Yahoo! branded toolbar will
be substantially similar in form to the example set forth in Exhibit 1 and
will include other hypertext links that provide access to additional
features of the Service only.
7. MERCHANT LICENSES TO YAHOO!.
(a) MERCHANT PRODUCT INFORMATION. Subject to the limitations set forth in
this Section 7(a), Merchant hereby grants to Yahoo! a worldwide,
non-transferable, non-sublicensable, non-exclusive license to use,
display, modify, make derivative works from, reproduce and distribute
Merchant Product Information and any portions thereof and any
derivative works therefrom during the Term solely for the purpose of
providing features of the Service, including without limitation the
right to incorporate Merchant Product Information into a database and
the right to display in any manner the results of search queries and
comparisons conducted by users of the Service. Yahoo! may modify and
create derivative works from Merchant Product Information only to the
extent reasonably necessary to fit the format of the Service or to
provide features of the Service. Merchant also grants to Yahoo! (i) the
right to maintain such Merchant Product Information on Yahoo! servers
during the Term; (ii) the right to authorize the downloading and
printing of Merchant Product Information, or any portion thereof, by
users; and (iii) subject to Merchant's prior approval, which will not
be unreasonably withheld, the right to use Merchant Product Information
for purposes of promoting Merchant products, Yahoo! Shopping or Yahoo!
generally.
(b) MERCHANT PAGES. Subject to the limitations set forth in this Section
7(b), Merchant grants to Yahoo! a worldwide, non-transferable,
non-sublicensable, non-exclusive license to use, display, modify,
reproduce and distribute Merchant Pages during the Term solely for the
purpose of responding to particular queries by users of the Service.
Notwithstanding the foregoing, Yahoo! may modify Merchant Pages only
pursuant to Section 3 above and to the extent necessary to format
Merchant Pages for the Service or to provide features of the Service by
placing a Yahoo! branded toolbar on Merchant Pages in a manner
substantially similar to the example set forth in Exhibit 1; provided,
however, that no modification will affect the substance or accuracy of
the underlying content on Merchant Pages. Merchant also grants to
Yahoo! (i) the right to designate and display a Yahoo! URL for all
Merchant Pages and (ii) subject to Merchant's prior approval, the right
to redirect certain hypertext links on Merchant Pages to certain pages
of the Service.
(c) CUSTOMER ORDER INFORMATION. Merchant owns Customer Order Information
and grants to
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Yahoo! a perpetual, worldwide, sublicensable, non-exclusive license to
use Customer Order Information in aggregate form, such that Customer
Order Information is not individually attributable to Merchant or to
individual users as customers of Merchant specifically, for research,
marketing or other promotional purposes. Yahoo!'s use of Customer Order
Information under this Section 7(c) will comply with the privacy
principles of TRUSTe, currently located at
http://www.truste.org/webpublishers/pub_principles.html.
8. YAHOO! LICENSES TO MERCHANT. Yahoo! may provide Merchant with access to
certain software owned by Yahoo! (the "Software") in order to, among other
things, facilitate the transmission of Customer Order Information to
Merchant. In the event that Yahoo! provides Merchant with access to
Software, the terms that govern such access to, and use of, said Software
will be mutually agreed upon by the parties.
9. CONFIDENTIALITY. Each party acknowledges that Confidential Information may
be disclosed to the other party during the Term of this RMI Agreement.
"Confidential Information" means any confidential, proprietary or trade
secret information relating to this RMI Agreement or disclosed by one party
to the other party during the Term of this RMI Agreement, including but not
limited to material terms of this RMI Agreement, information about users
(e.g. Customer Order Information), guidelines and specifications, technical
processes, source codes, product designs, sales, cost and other unpublished
financial information, product and business plans, projections and marketing
data that is not (a) generally known to the public; (b) disclosed in public
materials or otherwise in the public domain through no fault of the
receiving party; (c) lawfully known to or independently developed by the
receiving party prior to disclosure by the disclosing party; (d) lawfully
obtained from a third party; or (e) required or reasonably advised to be
disclosed by law. Except as otherwise expressly provided in this RMI
Agreement, each party agrees that (i) it will treat all Confidential
Information of the other party with the same degree of care as it accords to
its own Confidential Information and (ii) it will disclose Confidential
Information of the other party only to those of its agents or employees who
need to know such Confidential Information and who have agreed previously,
either as a condition of employment or in order to obtain the Confidential
Information, to be bound by terms substantially similar to those of this
Section 10. Merchant acknowledges and agrees that Yahoo! may access
information related to Merchant on Yahoo! servers during the Term as
necessary to identify or resolve technical problems or respond to complaints
about the Service.
10. PAYMENTS TO YAHOO!. Merchant will pay to Yahoo! one percent (1%) of Revenue
received by Merchant. "Revenue" means the total net retail amount of sales,
excluding shipping, handling, taxes, credit card processing fees,
fulfillment fees charged by third party suppliers (which will not exceed
$3.00 per item without Yahoo!'s prior written consent, which will not be
unreasonably withheld), refunds and rebates paid, and any chargebacks for
returned or canceled products, from all purchases of Merchant products that
are conducted on the Service. Merchant will pay such Revenue share amounts
quarterly within fifteen (15) days of the end of each quarter and will
accompany each payment with a written report certified by an officer of
Merchant that includes (a) the total retail dollar amount of sales made via
the Service and (b) the calculation of Revenue share due to Yahoo!. Merchant
will maintain complete and accurate records in accordance with generally
accepted methods of accounting for all such transactions and will allow
Yahoo!, at its own expense, to direct an independent certified public
accounting firm to inspect and audit such records during normal business
hours with written notice to Merchant. Such audits will not be
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required more often than one (1) time per twelve (12) month period, except
that Yahoo! may audit Merchant within three (3) months of any audit in which
a discrepancy of ten percent (10%) or greater is discovered. If such a
discrepancy is discovered, Merchant will pay the amount of the error to
Yahoo! within ten (10) days of such error's discovery. Yahoo! will pay the
cost of any audit conducted in accordance with this Section 10, except that
Merchant will pay such audit's cost, as long as such cost is computed on an
hourly and not contingent basis, if a discrepancy of ten percent (10%) or
greater was discovered in the immediately preceding audit. All fees are
payable in U.S. dollars. Late payments will bear interest at the rate of one
percent (1%) per month (or the highest rate permitted by law, if less). In
the event of any failure by Merchant to make payment, Merchant will be
responsible for all reasonable expenses (including attorneys' fees) incurred
by Yahoo! in collecting such amounts.
11. TERM, TERMINATION AND MODIFICATION. This RMI Agreement will become effective
as of the Effective Date and will, unless sooner terminated as provided
herein or as otherwise agreed, remain effective for at least twenty-four
(24) months from the date on which Merchant Pages become publicly available
via the Service and continue on a month to month basis thereafter until
terminated by either party with no less than thirty (30) days written notice
(the "Term"). No amendment to any provision of this RMI Agreement will be
effective unless in writing and signed by both parties. Upon termination,
Yahoo! will delete from its servers any and all information related to
Merchant, including but not limited to Merchant Product Information, but
excluding Customer Order Information retained in accordance with Section
7(c). Sections 4(b), 7(c), 9, 10 (to the extent that Yahoo! is owed fees
that arose during the Term and to the extent that Yahoo!'s audit right will
survive for one year after termination), 11 and 13 through 15 will survive
termination or expiration of this RMI Agreement.
12. REPRESENTATIONS AND WARRANTIES.
(a) BY MERCHANT. Merchant represents and warrants that it (i) has full
power and authority under all relevant laws and regulations to offer,
sell and distribute the products offered by it, including but not
limited to holding all necessary licenses from all necessary
jurisdictions to engage in the advertising and sale of such products,
and (ii) will not engage in any activities: (A) that constitute or
encourage a violation of any applicable law or regulation, including
but not limited to the sale of illegal goods or the violation of export
control or obscenity laws and (B) that are in any way connected with
the transmission of the unsolicited distribution of email or with any
unethical marketing practices.
(b) BY YAHOO!. Yahoo! represents and warrants that it (i) has full power
and authority under all relevant laws and regulations to offer the
Service and (ii) will not engage in any activities that are in any way
connected with the transmission of the unsolicited distribution of
email or with any unethical marketing practices.
13. INDEMNITY.
(a) BY MERCHANT. Merchant, at its own expense, will indemnify, defend and
hold harmless Yahoo! and its employees, representatives, agents and
affiliates against any claim, demand,
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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, (i) any products offered, distributed or sold by
Merchant in connection with the Service; (ii) any mistake, error or
omission made by Merchant, including but not limited to data corruption
and/or wrongful disclosure of Customer Order Information; or (iii) any
infringement of the United States copyright, trademark or other
proprietary right of a third party established under United States law
that results from Merchant's use of any content, trademarks, service
marks, trade names, copyrighted or patented material, or other
intellectual property used by Merchant; provided, however, that in any
such case: (A) Yahoo! provides Merchant with prompt written notice of
any such claim; (B) Yahoo! permits Merchant to assume and control the
defense of such action or proceeding upon Merchant's written notice to
Yahoo! of its intention to indemnify; and (C) upon Merchant's written
request, and at no expense to Yahoo!, Yahoo! will provide Merchant with
all available information and assistance reasonably necessary for
Merchant to defend such claim. Merchant 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.
Merchant 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 Merchant.
(b) BY YAHOO!. Yahoo!, at its own expense, will indemnify, defend and hold
harmless Merchant and its employees, representatives, agents and
affiliates against any claim, demand, action or other proceeding
brought by any third party against Merchant to the extent that such
claim, demand, action or other proceeding is based on, or arises out
of, (i) any corruption of Merchant Product Information by Yahoo! that
prevents the successful completion of any transaction between Merchant
and a potential customer of Merchant; (ii) any wrongful disclosure of
Customer Order Information by Yahoo!; or (iii) any infringement of the
United States copyright, trademark or other proprietary right of a
third party established under United States law that results from
Yahoo!'s use of Yahoo! trademarks, service marks, logos or other
distinctive Yahoo! brand features; provided, however, that in any such
case: (A) Merchant provides Yahoo! with prompt written notice of any
such claim; (B) Merchant permits Yahoo! to assume and control the
defense of such action or proceeding upon Yahoo!'s written notice to
Merchant of its intention to indemnify; and (C) upon Yahoo!'s written
request, and at no expense to Merchant, Merchant 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 Merchant, without Merchant'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 Merchant in connection with or arising from any such claim,
demand, action or other proceeding.
14. DISCLAIMER OF WARRANTIES AND LIMITATIONS OF LIABILITY AND DAMAGES. THE
SERVICE IS PROVIDED ON AN "AS IS" AND "AS AVAILABLE" BASIS WITHOUT
WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED,
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INCLUDING BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE. NEITHER THIS RMI AGREEMENT NOR ANY DOCUMENTATION
FURNISHED UNDER IT IS INTENDED TO EXPRESS OR IMPLY ANY WARRANTY THAT THE
SERVICES WILL BE UNINTERRUPTED, TIMELY OR ERROR-FREE.
EXCEPT FOR OBLIGATIONS UNDER SECTION 13, NEITHER PARTY NOR ITS PARENTS,
SUBSIDIARIES, AFFILIATES, OFFICERS, DIRECTORS, SHAREHOLDERS, EMPLOYEES AND
AGENTS WILL BE LIABLE, UNDER ANY CIRCUMSTANCES OR LEGAL THEORIES WHATSOEVER,
FOR ANY LOSS OF BUSINESS, PROFITS OR GOODWILL, LOSS OF USE OR DATA,
INTERRUPTION OF BUSINESS OR FOR ANY INDIRECT, SPECIAL, INCIDENTAL OR
CONSEQUENTIAL DAMAGES OF ANY CHARACTER, EVEN IF THAT PARTY IS AWARE OF THE
RISK OF SUCH DAMAGES. IN ADDITION, AND EXCEPT FOR OBLIGATIONS UNDER SECTION
13, NEITHER PARTY WILL BE LIABLE UNDER ANY CIRCUMSTANCES OR LEGAL THEORIES
FOR ANY DAMAGES THAT RESULT IN ANY WAY FROM MERCHANT'S USE OR INABILITY TO
USE THE SERVICE, OR THAT RESULT FROM ERRORS, DEFECTS, OMISSIONS, DELAYS IN
OPERATION OR TRANSMISSION, OR ANY OTHER FAILURE OF PERFORMANCE OF THE
SERVICE.
15. MISCELLANEOUS. Any and all press releases and other public announcements
relating to this RMI Agreement and/or the underlying transactions between
Yahoo! and Merchant and the method and timing of such announcements must be
approved in advance by the parties in writing. Any notice or communication
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, two (2) days following the date sent. If to Yahoo!,
such notices will be addressed to 3420 Central Expressway, Santa Clara, CA
95051. If to Merchant, such notices will be addressed to 17835 Ventura
Boulevard, Suite 310, Encino CA 91316, Attention Chief Operating Officer,
with a copy to Lenard & Gonzalez LLP, 1900 Avenue of the Stars, 25th Floor,
Los Angeles, CA 90067, Attention: Allen D. Lenard, Esq. The section headings
in this RMI Agreement are for convenience only and may not be relied upon to
construe or otherwise interpret this RMI Agreement. This RMI Agreement
constitutes the final, complete and exclusive statement of the agreement
between the parties with respect to its subject matter and supersede all
previous proposals. This RMI Agreement and the relationship between Merchant
and Yahoo! will be governed by the laws of the state of California without
regard to its conflict of law provisions. If any provision of this RMI
Agreement is found invalid or unenforceable, that provision will be enforced
to the maximum extent permissible, and the other provisions of this RMI
Agreement will remain in full force. Neither party's failure to exercise or
enforce any right or provision of this RMI Agreement will constitute a
waiver of such right or provision. Both parties agree that, regardless of
any statute or law to the contrary, any claim or cause of action arising out
of or related to use of the Service or this RMI Agreement must be filed
within two (2) years after such claim or cause of action arose, or be
forever barred.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties have caused this RMI Agreement to be executed by
their duly authorized representatives as of the date first written above.
YAHOO! INC.
By: /s/ ANIL SINGH By: /s/ KEITH YOKOMOTO
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Title: Senior Vice President Title: President and COO
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Address: 3420 Central Expressway Address:
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Santa Clara, CA 95051
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Telecopy: Telecopy:
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E-mail: E-mail:
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