LINKING AGREEMENT
THIS LINKING AGREEMENT ('Agreement') is made this 2nd day of April, 1998
('Effective Date'), by and between LYCOS BERTELSMANN GMBH & CO. KG, a German
Limited Partnership with a principal place of business at Carl Bertelsmann
Strasse 161 L. D - 33311 Guetersloh, Germany ('Lycos'), and CDNOW, INC., a
Pennsylvania corporation with a principal place of business at 610 Old York
Road, Suite 300, Jenkintown, PA 19046 USA ('CDnow').
RECITALS
WHEREAS, CDnow is a retailer of compact discs and other items for sale through
its Web service which is accessible through the URL www.cdnow.com (the 'CDnow
Site');
WHEREAS, Lycos is the owner or licensee of certain Lycos branded Web services
and other search and content areas in Europe as defined in Section 1(j) below;
WHEREAS, CDnow desires that Lycos integrate links form the Lycos Sites to a
co-branded version of the CDnow Site so that Lycos users may have convenient
access to the CDnow Site;
NOW, THEREFORE, the parties hereto for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged and intending to be
legally bound, hereby agree as follows:
1. DEFINITIONS. Capitalized terms not otherwise defined in this Agreement will
have the following meanings:
(a) 'Above-the-fold' shall mean situated within the portion of a page that
is designed to be visible on a standard computer screen with a resolution of 640
pixels by 480 pixels without requiring the user to scroll horizontally or
vertically throughout the page.
(b) 'Active Cosmic Credit Site' shall mean a website that has been
registered in CDnow's affiliate website program known as the 'Cosmic Credit
Program' through the Cosmic Credit links provided by CDnow on any of the Lycos
Sites and which has generated one non-returned purchase of a product on the
CDnow Site.
(c) 'Beyond the Banner' shall mean any type of promotion which involves
promotional techniques other than the placement of standard advertising banners
or standard advertising buttons and links.
(d) 'Carry-through Bar' shall mean a linking bar containing one or more of
the Proprietary Features of both of the parties which connects the Co-branded
Pages and the Lycos Sites, as set forth in Exhibit A.
(e) 'CDnow Branded Link' shall mean a link which contains a CDnow approved
Proprietary Feature of CDnow, is located on the Lycos Sites and will take Lycos
users to the Co-branded Pages.
(f) 'Co-branded Pages' shall mean pages of the CDnow Site which a visitor
from the Lycos Sites will link to and which shall display certain Proprietary
Features of both Lycos and CDnow. The Co-branded Pages can only be viewed by a
visitor who links to them directly from the Lycos Sites or through
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a stored URL (e.g. bookmark or similar technological storage mechanism). The
Co-branded Pages will reside on CDnow's server(s). The URL of the Co-branded
Pages shall be displayed as 'cdnow.lycos.de', the implementation and timing of
which shall be subject to reasonable commercial and technological considerations
by both parties. The URL shall be only be used for the purpose of pointing to a
webserver of CDnow's choice.
(g) 'Competitive Marketing' shall mean any link (which does not transfer to
the Co-branded Pages or CDnow's Site) and/or displayed message which promotes an
Entity which [XXX].
(h) 'Entity' shall mean any individual, limited liability company,
partnership, corporation, or division, subsidiary or business unit thereof,
retail site, World Wide Web site, organizational department or other entity.
(i) 'Launch Date' shall mean the date on which Lycos makes the CDnow
Branded Links available to users in accordance with the placement terms set
forth in Sections 2(a) and 2(b), provided that CDnow has approved such
placements (which approval shall not be unreasonably withheld or delayed) prior
to the launch. CDnow and Lycos shall use commercially reasonable efforts to
develop and deliver as necessary to each other, within two (2) weeks of the
Effective Date, any and all URLs, URL formats (as applicable), content, and
other materials necessary for Lycos to make available the CDnow Branded Links.
Subsequent to delivery of all necessary materials to Lycos, Lycos shall use
commercially reasonable efforts to make available the CDnow Branded Links to its
users within two (2) weeks of such delivery. If CDnow does not deliver
sufficient materials necessary to implement this Agreement within two (2) weeks
of the Effective Date, then the Launch Date shall be May 1.
(j) 'Lycos Sites' shall mean the Lycos branded web sites developed by or
for Lycos which are accessible through and are developed for the United Kingdom,
Germany, the Benelux Countries, France, Italy, Spain and Switzerland, and may be
developed for the other countries listed in Exhibit E (which is attached hereto
and made a part hereof), provided that Lycos shall have the right to choose the
music partner for the Web Sites, and including any upgraded or extended Lycos
branded services to those Sites:
(k) 'New Customer' shall mean any user that transfers from the Lycos Sites
directly to the Co-Branded Pages, creates a first-time account and at that time
or at any time thereafter during the Term of this Agreement makes a first
purchase of any product at the CDnow Site, which product is also shipped by
CDnow's distributor.
(l) 'Page View' shall mean a user's viewing of any webpage of the Lycos
Sites containing a CDnow Branded Link.
(m) 'Promotion Schedule' shall mean a written term sheet signed by an
authorized representative of each party pertaining to a promotion or special
marketing event entered into by both parties and describing the obligations of
each party with regard to such promotion or special marketing event.
(n) 'Proprietary Feature' shall mean any trademark, service mark, trade
name, domain name, text message, navigational element or design logo which is
proprietary to Lycos and/or CDnow.
(o) 'Term' is defined in Section 12 of this Agreement.
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(p) 'URL' shall mean Universal Resource Locator.
2. LINKING.
(a) CDNOW BRANDED LINK PLACEMENT. Lycos shall place CDnow Branded
Links on the Lycos Sites, except for Lycos Benelux which will be available as of
[XXX] in accordance with the requirements set forth in this Section 2(a).
(i) Lycos will place the following links on the pages indicated
(and all existing or future equivalents, extensions, additions or replacements
of such areas/pages on the Lycos Sites). The links shall be placed in accordance
with Exhibit B (which is attached hereto and made a part hereof) unless
otherwise agreed by the parties.
(A) [XXX].
(B) [XXX].
(C) Keyword Targeted Banners: Lycos will deliver [XXX]. The
parties agree to use commercially reasonable efforts to implement emerging
technologies (i.e. html dynamic banners) to improve and enhance advertising
performance and functionality in the banner ads. At a minimum, the Keywords
shall include those Keywords set forth in Exhibit D (which is attached hereto
and made a part hereof). CDnow may choose additional Keywords, provided such
Keywords are or will become available, in whole or in part, at the time of
request, subject to Lycos approval, which approval shall not be unreasonably
withheld or delayed. In addition, Lycos shall provide CDnow any and all
available Page Views of the [XXX].
(D) Sound Search: Every Search Sound result page will
include a permanent, non-rotating, Above-the-fold graphic CDnow Branded Link to
CDnow.
(E) Search Results: Lycos shall place(I) text and graphic
CDnow Branded Links on all of the music-related search results pages, up to
[XXX] Keywords in total, which CDnow may amend at any time and from time to
time, and CDnow shall provide in a mutually agreed upon file format, and (II)
graphic CDnow Branded Links on [XXX] or more, at Lycos discretion, of the
general search results pages. Such links will transfer users to the related
CDnow artist discography pages or musical genre pages. The implementation of the
CDnow Branded Links on the search results pages will be based on a data file
provided by CDnow. Wording for the actual text links shall be mutually agreed
upon by the parties, but the CDnow text links will be incorporated in an Above-
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the-fold, non-banner position. Lycos shall make commercially reasonable efforts
to make available to CDnow any and all music-related Keywords.
(F) [XXX]: CDnow will provide content for a [XXX] to be hosted on
the Lycos Sites across Europe. CDnow represents and warrants that it will use
commercially reasonable efforts to provide current, relevant content, localized
as necessary, for each of the Lycos Sites. Lycos shall have editorial approval
over the [XXX], such approval not to be unreasonably withheld or delayed. Such
content will include:
(I) A CDnow graphic logo Above-the-fold;
(II) A CDnow Search box, Above-the-fold, as well as a CDnow
Branded Link to CDnow's classical music Search page. The Search boxes will take
users directly to corresponding, co-branded artist discography pages;
(III) CDnow promotional links (the sizes to be mutually
agreed upon by the parties, but there will be a maximum of three links, each
link not to be smaller than 120 X 60 pixels) where CDnow can advertise its
current in store promotions (i.e. 3 CD's for $30);
Additional content provided by CDnow may include, but is not limited to:
(IV) News and reviews for various musical genres:
(V) Chats and online music events calendar:
(VI) Advanced orders; and
(VII) New releases.
(G) [XXX]: The parties agree to work together to create a
mutually acceptable [XXX]. The [XXX] will include content and commerce offerings
to provided by CDnow. The parties will work together to develop a mutually
agreeable look and feel for the [XXX].
(H) Other [XXX]: CDnow shall have a presence on other suitable
[XXX] in the form of a graphic CDnow Branded Link, Above-the-fold. The parties
agree to work together to maximize commerce opportunities that may arise in
other web guides.
(ii) Lycos represents and warrants that it will place the CDnow
Branded Links on its Sites in a manner that is at least as good or better than
any other third party links on such Sites that are of a substantially similar
nature and function as the CDnow Branded Links. Lycos agrees that CDnow may vary
the elements of the CDnow Branded Links not more than [XXX] upon five (5)
business days notice in writing (including e-mail). Furthermore, the parties
agree to work together in good faith to identify and implement appropriate
placement of the CDnow Branded Links throughout the Lycos Sites, including all
necessary testing of the performance of such CDnow Branded Links. Prior to
implementing any modifications to the CDnow Branded Links not requested by
CDnow. Lycos will consult with CDnow in good faith regarding such changes. CDnow
agrees to collaborate with Lycos' production staff in designing and implementing
changes to CDnow Branded Links. In addition, Lycos agrees to reasonably consider
recommendations from CDnow regarding placement of CDnow Branded Links in areas
of the Lycos Sites not set forth in this Agreement.
(iii) CDnow acknowledges that the depictions of webpages attached as
Exhibits to this Agreement reflect the current iterations of webpages, and that
Lycos, consistent with its need to maintain creative control of its Sites, may
modify those webpages; provided, however, that the relative
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prominence of the CDnow Branded Links shall be maintained on the redesigned
webpages in accordance with the obligations of the parties under Section
2(a)(i).
(b) MINIMUM PAGE VIEW GUARANTEES.
(i) During the first full year of the Term, Lycos will deliver
a minimum of [XXX] Page Views according to the following schedule:
Quarter/*/ Page Views
--------- ----------
1 [XXX]
2 [XXX]
3 [XXX]
4 [XXX]
(ii) During the second full year of the Term, Lycos will deliver
a minimum of [XXX] Page Views according to the following schedule:
Quarter/*/ Page Views
--------- ----------
1 [XXX]
2 [XXX]
3 [XXX]
4 [XXX]
(iii) During the third full year of the Term, Lycos will deliver
a minimum of [XXX] Page Views according to the following schedule:
Quarter/*/ Page Views
--------- ----------
1 [XXX]
2 [XXX]
3 [XXX]
4 [XXX]
/*/following the Launch Date
(c) LINK DEVELOPMENT AND TRANSLATION. Lycos shall produce the CDnow
Branded Links and Carry-through Bar, and CDnow will supply Lycos with all
information, artwork, logos, trademarks and URLs needed to produce such CDnow
Branded Links and Carry-through Bar. In the event that CDnow is requested by
Lycos to produce the CDnow Branded Links, Carry-through Bar or other elements of
the Co-branded Pages, CDnow shall produce such items and Lycos (as appropriate)
will supply CDnow with all information, artwork, logos, trademarks and URLs
necessary in a format specified by CDnow. CDnow shall be responsible for all
translation of the CDnow Branded Links and other CDnow content, such translation
to be performed at CDnow's sole discretion and cost.
(d) LINKS TO COBRANDED PAGES. When users transfer from the Lycos Sites to
CDnow, the initial Cobranded Page to which the users transfer shall have the
principal purpose of the promotion or sale of music-related products.
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3. PAYMENTS; AUDIT; REPORTING.
(a) MARKETING FEE. During the Term, in consideration of Lycos
fulfilling its obligations under this Agreement and subject to terms of this
Agreement, CDnow will pay Lycos marketing fees, in US dollars as follows:
(i) Payment of $5,500,000 based on the following schedule:
Year 1
------
Date Payment
---- -------
Upon the Effective Date $500,000
Upon the Launch Date $380,000 (Implementation Fee)
First day of the 2nd quarter/*/ $180,000
First day of the 3rd quarter/*/ $180,000
First day of the 4th quarter/*/ $180,000
Year 2
------
Date Payment
---- -------
First day of the 5th quarter/*/ $180,000
Last day of the 5th quarter/*/ $425,000
Last day of the 6th quarter/*/ $425,000
Last day of the 7th quarter/*/ $425,000
Last day of the 8th quarter/*/ $425,000
Year 3
------
Date Payment
---- -------
Last day of the 9th quarter/*/ $550,000
Last day of the 10th quarter/*/ $550,000
Last day of the 11th quarter/*/ $550,000
Last day of the 12th quarter/*/ $550,000
/*/following the Launch Date
(ii) $[XXX] in cash for each New Customer to be paid within
thirty (30) days of the end of each quarter in which such New Customers are
acquired.
(iii) $[XXX] in cash for each Active Cosmic Credit Site to be
paid within thirty (30) days of the end of each quarter in which such Active
Cosmic Credit Sites are acquired. In no event will a New Customer fee be paid to
Lycos as part of the creation of an Active Cosmic Credit Site.
(b) AUDIT RIGHTS; UNDER/OVER PAYMENTS. Each party shall maintain complete
and accurate records in accordance with US Generally Accepted Accounting
Principles (GAAP) or the German
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equivalent for all transactions which are the subject of this Agreement for not
less than (3) years after the last payment is due under this Agreement. A 'big
six' or other mutually acceptable accounting firm that is independent to Lycos
and CDnow retained by a party (the auditing party) shall have access to such
records of the other party (the audited party), upon reasonable notice, for the
purposes of audit during normal business hours, for so long as such records are
required to be maintained. If such accounting firm determines that any
additional payment is due the auditing party by the audited party, and such
payment is not the subject of a good faith dispute between the parties, then the
audited party shall promptly make payment of such amount to the auditing party.
If a party overpays the other party, the party that has made such overpayment
shall be entitled to a credit against the next payment due to the other party in
the amount of the overpayment, unless such overpayment is the subject of a good
faith dispute between the parties or no further payments are due under this
Agreement, in which case, the party that has received the overpayment will
promptly refund to the other party the amount of the overpayment.
(c) REPORTING.
(i) CDnow shall provide Lycos with a monthly report listing the
number of New Customers and Active Cosmic Credit Sites generated from the Lycos
Sites and calculated, in sufficient detail, for Lycos to determine the amounts
payable by CDnow to Lycos hereunder. Such report is to be used by Lycos to
actively track whether CDnow is fulfilling its obligations under this Agreement.
(ii) Beginning on the Effective Date. Lycos will provide CDnow with
weekly reports of Page Views (categorized by the areas set forth in Section
2(a)(i) or any future equivalent thereto or newly developed area which would
contain CDnow Branded Links) delivered to users of the Lycos Sites during the
immediately preceding week in a form and via media mutually agreeable to the
parties. Such report is to be used by CDnow to actively track whether Lycos is
fulfilling its obligations under this Agreement.
4. [XXX]
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5. EXCLUSIVITY.
(a) In no event will Lycos: [XXX].
(b) Lycos shall offer to CDnow a right-of-first-offer and right-of-first-
negotiation for any and all opportunities that Lycos intends to offer to any
other Entity which principally sells pre-recorded music products. Once Lycos
informs CDnow of each such opportunity and if CDnow informs Lycos of its
interest in each such opportunity, Lycos and CDnow agree to diligently negotiate
in good faith for not less than [XXX] a binding agreement concerning each such
opportunity. Lycos will use best efforts to obtain a right-of-first-offer and
right-of-first-negotiation for any and all opportunities that may be available
to any other music seller for any international properties in which Lycos
maintains an ownership interest or licensing arrangement.
6. THE CO-BRANDED PAGES. CDnow shall place a Carry-through Bar on the top and
bottom of the Co-branded Pages which will allow the visitor to return to the
Lycos Sites. CDnow and Lycos shall mutually agree upon the overall design of the
Carry-through Bar within the specifications provided by CDnow in the
Carry-through Bar Specifications, which is attached hereto as Exhibit A and made
a part hereof. In the event that CDnow should redesign its Site, CDnow shall
use good faith efforts to provide substantially similar functionality and
prominence. The final determination of any new design shall be at CDnow's sole
discretion.
7. FULFILLMENT. CDnow shall have the sole right and responsibility for
processing all orders which it receives through every aspect of the retail
transaction, including receiving, filling, shipping and handling, collecting
payment, tracking and transaction security. All orders for CDnow's products
shall be placed by customers directly with CDnow and shall be subject to
acceptance by CDnow. All orders accepted shall be subject to the terms and
conditions of CDnow's then current terms and conditions of sale. Such terms may
be changed at any time, without notice to Lycos. CDnow shall have no obligation
to ship any orders unless payment in full is received in advance. Prices for the
products shall be set solely by CDnow. CDnow may, at its discretion, change its
prices at any time, without notice to Lycos.
8. SPECIAL PROMOTIONS. Lycos acknowledges that in the event that the parties
enter into any special marketing and promotional activities together, there may
be additional costs including, but not limited to warehousing costs, management
fees and fulfillment fees, associated with such activities. The parties shall
agree in advance in a Promotion Schedule as to the scope of such special
marketing and promotional activities and the amount of funds and/or other
resources to be contributed to such activities by CDnow and Lycos. Any and all
Promotion Schedules shall be appended to this Agreement. CDnow and Lycos shall
mutually agree upon a joint promotion, such as a musical concert, to announce
this Agreement, such
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promotion to physically take place in Continental Europe or the United Kingdom
and executed within [XXX] of the Launch Date. CDnow and Lycos shall
share the cost of the promotion equally, up to [XXX] each.
9. STAFFING. Each party agrees to provide staffing sufficient for such party to
meet its obligations under this Agreement in a timely manner. Further, each
party shall appoint a relationship manager who shall have responsibility for
managing the day-to-day activities of the party under this Agreement.
10. RIGHT OF NEGOTIATION. In the event that CDnow desires to renew this
Agreement at the end of the Term, Lycos agrees to promptly and diligently
negotiate with CDnow in good faith to determine reasonable terms and conditions
of renewal, beginning not less than [XXX] prior to the end of the Term of this
Agreement. During the Term, Lycos agrees not to enter into any discussions,
negotiations, agreements or the like with any seller of music regarding the
Lycos Sites: provided, however, that Lycos is free to do so in the last [XXX] of
the Term if Lycos and CDnow have not agreed upon renewal terms prior to such
time.
11. LICENSE; OWNERSHIP.
(a) Each party hereby grants to the other party, during the Term of this
Agreement, a non-exclusive, non-transferable license to use its names, logos,
trademarks and service marks, copyrights and proprietary technology solely as
reasonably necessary to perform its obligations under this Agreement: provided,
however, that any promotional materials containing a party's name will be
subject to the other party's prior written approval.
(b) Each party owns and shall retain all right, title and interest in
its names, logos, trademarks and service marks, copyrights and proprietary
technology including without limitation, those names, logos, trademarks and
service marks, copyrights and proprietary technology currently used or any which
may be developed in the future. Neither party shall copy, distribute, reproduce
or use the other party's names, logos, trademarks and service marks, copyrights
and proprietary technology except as expressly permitted under this Agreement.
Upon notice from the one party, the other party shall immediately terminate the
use of any advertising materials using the notifying party's name or logo.
(c) Neither party shall contest or impair, directly or indirectly, the
other party's ownership of any of such other party's names, logos, trademarks
and service marks, copyrights, Proprietary Features and proprietary technology,
anywhere, nor the fact that the use of such names, logos, trademarks and service
marks, copyrights and proprietary technology by it will inure to the benefit of
the other party. Neither party will assist others to contest or impair the same
and each party hereby expressly acknowledges the other party's superior rights
therein.
12. TERM AND TERMINATION. The term of this Agreement shall commence upon the
Effective Date and shall continue for three (3) years from the Launch Date
(the 'Term'), unless previously terminated as set forth below. The first year
of the Term shall end twelve months after the Launch Date. The second year of
the Term shall end twenty-four months after the Launch Date, and so on.
(a) During the Term:
(i) Any party may terminate this Agreement at any time: (A)
immediately upon written notice if another party becomes insolvent,
files a petition in bankruptcy or makes an assignment for the benefit of
its creditors; or (B) thirty (30) days after written notice to another
party of such
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other party's breach of any of its material obligations under this
Agreement, which breach is not remedied within such 30-day period. Such
termination shall not relieve the party in breach from liability for the
performance of its obligations prior to such termination and shall be in
addition to all other rights and remedies the terminating party may have
available to it under this Agreement or at law or in equity:
(ii) Lycos failure to meet the Launch Date shall constitute a
breach of a material obligation under this Agreement.
(b) Upon the termination or expiration of this Agreement, each party
will: (i) immediately cease any and all use of the other parties intellectual
property, including, without limitation, the other party's trademarks,
tradenames, service marks, and other proprietary indicia; and (ii) promptly
(within ten (10) days) return all assets (digital, proprietary or otherwise)
belonging to the other.
(c) Upon the termination or expiration of this Agreement, Lycos shall
continue to point the URL 'cdnow.lycos.de' to a URL of CDnow's choice for one
year. Subsequent to such period, Lycos shall cease all use of such URL.
(d) 1, 3(b), 7, 11(b), 11(c), 12(b), 12(c), 14, 15 and 16 shall survive
termination of this Agreement.
13. REPRESENTATIONS.
(a) Each party represents and warrants that it has, and will retain
during the Term hereof, all right, title and authority to enter into this
Agreement to grant the other parties the rights and licenses herein granted and
to perform all of its obligations under this Agreement.
(b) Each party represents and warrants that (i) there are no
restrictions, agreements or understandings whatsoever to which the representing
party is a party which would prevent or make unlawful its execution of this
Agreement or its engagement hereunder; and (ii) that its execution of this
Agreement and its engagement hereunder shall not constitute a breach of any
contract, agreement or understanding, oral or written, to which it is a party or
by which it is bound.
(c) CDnow represents and warrants that to its knowledge any content
provided by CDnow and displayed on the CDnow Site, the Co-branded Pages or the
Lycos Sites does not constitute defamation or invasion of the right of privacy
or publicity, or infringement of the copyright, trademark or other intellectual
property right, of any third party. This representation and warranty shall
specifically not apply to content provided by visitors to the Co-branded Pages,
the Lycos Sites, or the CDnow Site such as visitors who use chat rooms, bulletin
boards, or other forums on such Site which allow visitors to display material
that is not within the control of CDnow.
(d) Lycos represents and warrants that to its knowledge any content
provided by Lycos and displayed on the Co-branded Pages, the CDnow Site or the
Lycos Sites does not constitute defamation or invasion of the right of privacy
or publicity, or infringement of the copyright, trademark or other intellectual
property right, of any third party. This representation and warranty shall
specifically not apply to content provided by visitors to the Co-branded Pages,
the Lycos Sites or the CDnow Site such as
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visitors who use chat rooms, bulletin boards, or other forums on such Site which
allow visitors to display material that is not within the control of Lycos.
(e) Lycos represents and warrants that (i) it will continue to expend at
least a substantially similar amount of resources (e.g. budget, staff) as it is
currently committing as of the time of execution of this Agreement for the Lycos
Sites: and (ii) it will not develop or promote any space on the Lycos Sites
which would contain any Competitive Marketing and which functions in a
substantially similar manner to or provides the user with a substantially
similar experience as the spaces on the Lycos Sites that contain CDnow Branded
Links as contemplated by this Agreement.
14. INDEMNIFICATION.
(a) INDEMNIFICATION BY CDNOW. CDnow shall indemnify, defend and hold
harmless Lycos and its affiliates, and their respective shareholders,
directors, officers, employees and agents, against any and all claims, actions,
liabilities, losses, and expenses (including reasonable attorneys' fees) brought
by a third party relating to or arising out of any claim that any content
provided by CDnow and displayed on the Co-branded Pages, the CDnow Site, or the
Lycos Sites constitutes a defamation or invasion of the right of privacy or
publicity, or infringement of the copyright, trademark or other intellectual
property right, of any third party, including any claims arising out of the
offer of sale of pre-recorded music products and the performance of sound
samples related thereto via the Internet. This indemnity shall specifically not
apply to content provided by visitors to the Co-branded Pages, the CDnow Site,
or the Lycos Sites such as visitors who use CDnow's chat rooms, bulletin boards,
or other forums which allow visitors to display material that is not within the
control of CDnow.
(b) INDEMNIFICATION BY LYCOS. Lycos shall indemnify, defend and hold
harmless CDnow and its affiliates, and their respective shareholders, directors,
officers, employees and agents, against any and all claims, actions,
liabilities, losses, and expenses (including reasonable attorneys' fees) brought
by a third party relating to or arising out of any claim that any content
provided by Lycos and displayed on the Co-branded Pages, the CDnow Site or the
Lycos Sites constitutes a defamation or invasion of the right of privacy or
publicity, or infringement of the copyright, trademark or other intellectual
property right, of any third party. This indemnity shall specifically not apply
to content provided by visitors to the Co-branded Pages, the Lycos Sites or the
CDnow Site such as visitors who use chat rooms, bulletin boards, or other forums
on such Site which allow visitors to display material that is not within the
control of Lycos.
(c) OBLIGATIONS OF THE INDEMNIFIED PARTY. The indemnified party shall
promptly provide the indemnifying party with written notice of any claim which
the indemnified party believes falls within the scope of this Section 14(c);
provided, however, that, except to the extent the indemnifying party is actually
prejudiced by the indemnified party's failure to provide such prompt notice,
such failure to provide prompt notice hereunder shall not limit the indemnified
party's rights under this Paragraph 14(c). The indemnified party may, at its own
expense, assist in the defense of any such claim if it so chooses, provided that
the indemnifying party shall control such defense and all negotiations relative
to the settlement of any such claim.
(d) SETTLEMENT. No party shall, without the prior written consent of
another party, settle, compromise or consent to the entry of any judgment with
respect to any pending or threatened claim unless the settlement, compromise or
consent provides for and includes an express, unconditional release of all
claims, damages, liabilities, costs and expenses, including reasonable legal
fees and expenses, against the indemnified party.
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15. CONFIDENTIALITY; PUBLIC RELATIONS.
(a) NON-DISCLOSURE AGREEMENT. The parties acknowledge that, as a result
of negotiating, entering into and performing this Agreement, each party has and
will have access to certain of the other party's Confidential Information (as
defined below). Each party also understands that misuse and/or disclosure of
that information could adversely affect the other party's business. Accordingly,
during the Term of this Agreement and thereafter, each party shall use and
reproduce the other party's Confidential Information only for purposes of this
Agreement and only to the extent necessary for such purpose and shall restrict
disclosure of the other party's Confidential Information to its employees,
consultants or independent contractors with a need to know and shall not
disclose the other party's Confidential Information to any third party without
the prior written approval of the other party. Notwithstanding the foregoing, it
shall not be a breach of this Agreement for either party to disclose
Confidential Information of the other party if required to do so under law in a
judicial or other governmental investigation or proceeding, provided the other
party has been given prior notice and the disclosing party has sought all
available safeguards against widespread dissemination prior to such disclosure.
(b) CONFIDENTIAL INFORMATION DEFINED. As used in this Agreement, the term
'Confidential Information' refers to: (i) the terms and conditions of this
Agreement; (ii) each party's trade secrets, business plans, strategies, methods
and/or practices; and (iii) other information relating to either party that is
not generally known to the public, including information about either party's
personnel, products, customers, marketing strategics, services or future
business plans. Notwithstanding the foregoing, the term 'Confidential
Information' specifically excludes (A) information that is now in the public
domain or subsequently enters the public domain by publication or otherwise
through no action or fault of the other party; (B) information that is known to
either party without restriction, prior to receipt from the other party under
this Agreement, from its own independent sources as evidenced by such party's
written records, and which was not acquired, directly or indirectly, from the
other party; (C) information that either party receives from any third party
reasonably known by such receiving party to have a legal right to transmit such
information, and not under any obligation to keep such information confidential;
and (D) information independently developed by either party's employees or
agents provided that either party can show that those same employees or agents
had no access to the Confidential Information received hereunder.
(c) NOTIFICATIONS REQUIRED BY LAW OR REGULATION. The parties agree that
it shall not be deemed a breach of this Agreement for any party to disclose the
terms and conditions of this Agreement in any regulatory filing with the
Securities & Exchange Commission, any stock exchange or the NASDAQ National
Market, which such party determines in good faith is required, provided such
party seeks confidential treatment of the material financial terms and
conditions of this Agreement.
(d) PUBLICITY. No party will make any detailed announcements or
statements to the public or create any written materials concerning the
relationship between them without the prior written consent of the other, which
is not to be unreasonably withheld or delayed. In no event shall either party or
any content, products or services present on either party's website or service
disparage the other party or any of the other party's affiliates.
(e) PRESS RELEASES. Lycos and CDnow shall jointly prepare a press release
concerning the existence of this Agreement and mutually agree upon the contents
of such press release. Unless required by law, legal process or governmental
regulation. CDnow agrees not to issue any press release regarding European
marketing or expansion prior to issuing a press release regarding this
Agreement.
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16. MISCELLANEOUS
(a) INDULGENCES. ETC. Neither the failure nor any delay on the part of
either party to exercise any right, remedy, power or privilege under this
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, remedy, power or privilege preclude any other or further
exercise of the same or of any other right, remedy, power or privilege, nor
shall any waiver of any right, remedy, power or privilege with respect to any
occurrence be construed as a waiver of such right, remedy, power, or privilege
with respect to any occurrence or as a waiver of any other right, remedy, power
or privilege.
(b) DISPUTE RESOLUTION. If a dispute arises out of or relates to this
Agreement, or its breach, and cannot otherwise be amicably resolved within
thirty (30) days of the date one party notifies the other party of the existence
of such dispute, the parties agree to submit the dispute to arbitration by and
under the rules of the International Chamber of Commerce ('ICC'), and to an
arbitrator that they shall mutually select and agree upon, and the arbitration
shall be held in New York, New York. In the event the parties are unable to
agree on an arbitrator within fifteen (15) days after the dispute is submitted
for arbitration, the arbitrator shall be selected by the ICC. An award shall be
made within (6) months of selection of the arbitrator. The arbitrator shall
determine issues to be arbitrated, but may not limit, expand or otherwise modify
the terms of this Agreement nor have authority to award punitive damages or
other damages in excess of compensatory damages and each party irrevocably
waives any claim thereto. At the request of either party, the arbitrator shall
provide to the parties findings of facts and conclusions of law supporting any
decision and/or award. The decision and/or award of the arbitrator shall be
final and binding upon the parties and may be entered in any court of competent
jurisdiction. The parties shall provide the arbitrator and any expert witnesses
with any and all information pertaining to the dispute between the parties that
the arbitrator or expert witnesses may request in such arbitration, provided
such information shall be deemed the Confidential Information of the disclosing
party. The parties, their representatives and counsel, other participants and
the arbitrator shall hold the existence, content and results of the arbitration
in confidence, except as may be required to be disclosed by applicable law.
(c) NOTICES. All notices, requests, demands, and other communications
required or permitted under this Agreement and the transactions contemplated
herein shall be in writing and shall be deemed to have been duly given, made and
received when delivered against receipt or when sent by registered air mail,
return receipt requested, postage prepaid, address as set forth below:
(i) If to CDnow: (ii) If to Lycos:
CDnow, Inc. Lycos Bertelsmann
610 Old York Road GmbH & Co. KG
Jenkintown, PA 19046 Carl Bertelsmann Str. 161 L
USA Postfach 315
D 33311 Guetersloh
Attn: General Counsel Germany
Attn: CEO
with a copy to:
Dr. Dannhoff
Bertelsman AG
Legal Department
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Carl Bertelsmann Str. 270
D 33311 Guetersloh
Any party may alter the address to which communications or copies are to be sent
by giving notice of such change of address in the manner set forth herein.
(d) PROVISIONS SEPARABLE. The provisions of this Agreement are independent
of and separable from each other, and no provision shall be affected or rendered
invalid or unenforceable by virtue of the fact that for any reason any other or
others of them may be invalid or unenforceable in whole or in part.
(e) ENTIRE AGREEMENT. The terms and conditions of this Agreement and any
and all Exhibits attached hereto represent the entire understanding between the
parties hereto with respect to the subject matter hereof, and supersede all
prior and contemporaneous agreements and understandings, inducements or
conditions, express or implied, oral or written. The express terms hereof
control and supersede any course of performance and/or usage of trade
inconsistent with any of the terms hereof. This Agreement may not be modified or
amended other than by an agreement in writing signed by both parties.
(f) SECTION HEADINGS. The section headings in this Agreement are for
convenience only; they form no part of this Agreement and shall not affect its
interpretation.
(g) TELEFAXES CONSTITUTE VALID DOCUMENTS. This Agreement and subsequent
modifications may be transmitted by telecopy facsimile machine and such
facsimile copy shall be deemed an original if all pages thereof are initialed
and the Agreement or modifications are signed by the duly authorized
representative of the parties. Such facsimiles shall constitute valid, binding
documents and shall be regarded as such upon receipt. The original of the
document sent by telefax shall be promptly sent within seventy-two (72) hours
overnight courier or first class mail to the receiving party so that accurate
files may be maintained. Failure to send timely any original document shall not
affect the validity or binding nature of such document.
(h) FORCE MAJEURE. Neither party shall be held to be in breach of this
Agreement by any reason of any failure or delay in its performance hereunder if
such failure is due to causes beyond its reasonable control, including but not
limited to acts of the other party, acts of God, delays in transportation,
inability beyond its reasonable control to obtain necessary labor or materials,
or events such as fires, floods, earthquakes, storms, war, act of public enemy,
civil commotions and the like or by any law, rule, regulation, order or other
action by public authority. To the extent failure to perform is caused by such
an event, such party shall be excused from performance hereunder so long as such
event continues to prevent such performance and provided the non-performing
party takes all reasonable steps to resume full performance.
(i) INDEPENDENT CONTRACTOR. Each party shall act as independent contractor
and shall have no authority to obligate or bind the other in any respect.
Neither the employees of Lycos nor the employees of CDnow shall represent
themselves to the employees of the other.
(j) COMPLIANCE WITH LAWS. Each party shall comply with all federal, state
and local laws, licensing regulations and rulings of governmental bodies having
jurisdiction over its business. Nothing in this Agreement shall be construed to
require either party to perform any act in violation of any laws, regulations or
rulings.
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(k) DISCLAIMER OF WARRANTY. EXCEPT AS OTHERWISE PROVIDED FOR IN THIS
AGREEMENT. EACH PARTY'S SITE(S) IS PROVIDED ON AN 'AS IS' BASIS WITHOUT
WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO
WARRANTIES OF TITLE OR IMPLIED WARRANTIES OR MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE. OTHER THAN THOSE WARRANTIES WHICH ARE IMPLIED BY OR
INCAPABLE OF EXCLUSION. RESTRICTION OR MODIFICATION UNDER THE LAWS APPLICABLE TO
THIS AGREEMENT.
(l) LIMITATION OF LIABILITY. UNDER NO CIRCUMSTANCES SHALL EITHER PARTY BE
LIABLE TO THE OTHER PARTY FOR INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL OR
EXEMPLARY DAMAGES (EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF
SUCH DAMAGES), ARISING FROM ANY PROVISION OF THIS AGREEMENT (INCLUDING SUCH
DAMAGES INCURRED BY THIRD PARTIES), SUCH AS, BUT NOT LIMITED TO, LOSS OF REVENUE
OR ANTICIPATED PROFITS OR LOST BUSINESS. IN NO EVENT SHALL ANY PARTY BE LIABLE
FOR DAMAGES IN EXCESS OF THE AMOUNT RECEIVED OR PAID BY SUCH PARTY UNDER THIS
AGREEMENT, PROVIDED THAT THIS SECTION DOES NOT LIMIT ANY PARTY'S LIABILITY FOR
(A) WILLFUL AND MALICIOUS MISCONDUCT: (B) DIRECT DAMAGES TO REAL OR TANGIBLE
PERSONAL PROPERTY: (C) BODILY INJURY OR DEATH CAUSED BY NEGLIGENCE: OR (D) SUCH
PARTY'S INDEMNIFICATION OBLIGATIONS HEREUNDER.
(m) LIABILITY FOR TERMINATION. In the event of proper termination as set
forth herein, the terminating party shall not be liable for reimbursement of
damages as a result of such proper termination on account of any loss of
prospective profits or on account of expenditures, investments, leases or other
commitments relating to the other party's business or good will.
(n) EXPENSES. Except as otherwise provided for in this Agreement, each
party shall be responsible for any and all expenses, charges and fees incurred
by it in connection with its duties hereunder, and it shall not be reimbursed
for the same by the other party.
(o) BINDING NATURE OF AGREEMENT. This Agreement shall be binding upon the
parties hereto and their respective heirs, executors, successors and assigns.
No part may, without the prior written consent of the other, assign or transfer
this Agreement or any obligation incurred hereunder. Any attempt to do so in
contravention of this Section 16(o) shall be void and of no force and effect.
(p) TIMELY PERFORMANCE. Each party acknowledges that in the performance of
this Agreement, time shall be considered of the essence.
(q) CONTROLLING LAW. This Agreement and all questions relating to its
validity, interpretation, performance and enforcement shall be governed by and
construed in accordance with the laws of the Commonwealth of Massachusetts,
other than conflicting choice-of-law provisions.
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IN WITNESS WHEREOF, the party's duly authorized representatives have executed
this Agreement as of the Effective Date.
CDNOW, INC. LYCOS BERTELSMANN GMBH & CO
KG
By: /s/ Jason Olim By: /s/ Christoph Mohn
----------------------------- --------------------------
Name: JASON OLIM Name: CHRISTOPH MOHN
--------------------------- --------------------------
Date: April 2, 1998 Date: April 2, 1998
--------------------------- --------------------------
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EXHIBIT A
CARRY-THROUGH BAR SPECIFICATIONS AS OF 4/15/97
SIZE
Total Carry-through Bar Size: 468(w) x 25(h) pixels as of April 1, 1997 all
Carry-through Bar sizes must be 468(w) x 25(h) to comply with the Internet
Advertising Bureau's (IAB) banner standards.
Live area for Partner Logo: 360(w) x 24(h) pixels
COLOR
Bar is black at all times.
Only partner logos icons can be as many colors as desired with a black
background 'Return to... ' copy is mandatory and must be set up as white
Helvetica Neue Black 10pt type, centered and 5 pixels in from the left-hand
side of the first black bar
We recommend all copy to be white
To pick up a template go to http://cdnow.com/cobrand_template
FORMAT
Must be saved in a GIF file format
PLACEMENT
Carry-through bar is placed on the top and bottom of each CDnow page. Only those
people who visit CDnow from your site will see the Carry-through bar
URL/ADDRESS
Partners have the option of 1 to 3 links on their Carry-through bar -- The URLs
will be provided by the partner
If more than one link is desired, the bar must consist of multiple gif images
that reference previous Carry-through bar specifications. When using multiple
gif images keep two pixels between each bar. No image maps are permitted. Please
see the following page for more examples of possible banner solutions.
[Graphics intentionally omitted.]
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SOURCE CODE
CDnow will provide the partner with a from equals (from=) tag. This tag allows
us to indentify customers coming from the Partners site to CDnow.
TIMING
CDnow requires a minimum of five business days from when we receive the
Carry-through bar to implement it on our site.
CARRY-THROUGH BAR SAMPLES
[Graphics intentionally omitted.]
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EXHIBIT B
CDNOW BRANDED LINK PLACEMENTS
[Graphics intentionally omitted.]
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EXHIBIT C
COMPLIANCE WITH EXISTING CONTRACTS
The following list the existing agreements which constitute and exception to
Competitive Marketing and the dates by which they terminate.
[XXX]
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EXHIBIT D
Keywords:
[XXX]
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EXHIBIT C
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TERRIRORY
---------
[XXX]
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Linking Agreement - Lycos Bertelsmann GmbH & Co. KG and CDnow Inc.
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