CO-BRANDING AGREEMENT
(FORM)
This CO-BRANDING AGREEMENT (the "Agreement") is made and entered into as of
Nov 5, 1999, (the "Effective Date") by and between NETTAXI Online Communities,
Inc., a Delaware corporation with principal offices at 2165 S. Bascom Avenue,
Campbell, California 95008 ("NETTAXI"), and Solutions Media, Inc., dba
SpinRecords.com a Delaware Corporation, with offices at 11440 West Barnardo Ct.,
Suite 170, San Diego, CA 32127 ("SpinRecords.com" or "Client").
RECITALS
A. NETTAXI is in the business of providing entertainment, education,
and information services over the world wide web through its Internet web site
at http://www.NETTAXI.com.
B. SpinRecords.com is in the business of providing entertainment and
information services over the World Wide Web through its internet website at
http://www.spinrecords.com.
C. NETTAXI and SpinRecords.com desire co-brand their services under the
terms and conditions set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises contained herein,
the parties hereby agree as follows:
1. DEFINITIONS
1.1 "Spinrecords.com Brand Features" means the SpinRecords.com name and
logo and other trademarks, trade names and service names including but not
limited to those set forth on Exhibit A attached hereto and incorporated herein
---------
by reference and all Intellectual Property Rights related thereto.
SpinRecords.com Brand Features shall include any derivatives, improvements or
modifications thereto or thereof and any Intellectual Property rights related
thereto.
1.2 "SpinRecords.com Pages" means the SpinRecords.com Web-based pages
that incorporate certain SpinRecords.com services, as the same may be updated or
modified from time to time in SpinRecords.com's sole discretion, currently
located at http://www.spinrecords.com.
1.3 "Impressions" means the loading of all or part of a Web page into
the browser of a User.
1.4 "Intellectual Property Rights" means all current and future
worldwide trademark, patents and patent rights, utility models, copyrights, mask
work rights, trade secrets, and all other intellectual property rights and the
related documentation or other tangible expression thereof.
1.5 "NETTAXI Brand Features" means the NETTAXI name and logo and any
other trademarks, trade names and service names of NETTAXI, including but not
limited to those set forth on Exhibit B attached hereto and incorporated herein
---------
by reference and all Intellectual Property Rights related thereto. NETTAXI Brand
Features shall include any derivatives, improvements or modifications thereto or
thereof and any Intellectual Property rights related thereto.
1.6 "NETTAXI Pages" means the NETTAXI's Web-based pages that
incorporate certain NETTAXI services, as the same may be updated or modified
from time to time in NETTAXI's sole discretion, currently located at
http://www.NETTAXI.com.
1.7 "Statement of Work" means the Statement of Work attached hereto as
Exhibit C and incorporated herein by reference.
----------
1.8 "User" means a person using a software browser to view the World
Wide Web.
2. CO-BRANDING, MARKETING AND PROMOTION
2.1 The SpinRecords.com Pages. SpinRecords.com shall brand the
---------------------------
SpinRecords.com Pages with the NETTAXI Brand Features in the manner set forth in
the Statement of Work. NETTAXI will provide electronic copies of the NETTAXI
Brand Features upon SpinRecords.com's request. All Spinrecords.com Pages shall
display appropriate intellectual property legends, including but not limited to
the copyright notice and trademark references.
1
<PAGE>
2.2 The NETTAXI Pages. NETTAXI shall brand certain NETTAXI Pages with
------------------
the SpinRecords.com Brand Features in the manner set forth in the Statement of
Work. SpinRecords.com will provide electronic copies of the SpinRecords.com
Brand Features upon NETTAXI's request. All NETTAXI Pages shall display
appropriate intellectual property legends, including but not limited to the
copyright notice and trademark references. NETTAXI shall not be obligated to
co-brand those pages containing content which NETTAXI has branded with a third
party which: (i) NETTAXI is prohibited from co-branding pursuant to another
agreement; (ii) NETTAXI is technically unable to co-brand; or (iii) are
commercially unreasonable, in NETTAXI's discretion, to co-brand.
2.3 Marketing by SpinRecords.com. Throughout the term of this
------------------------------
Agreement, SpinRecords.com shall use reasonable commercial efforts to market the
NETTAXI Brand Features in order to maximize the number of visitors to the
NETTAXI Pages in accordance with the Statement of Work. The parties shall review
the Statement of Work and NETTAXI's marketing activities on a quarterly basis in
order to assess the performance and agree upon additional activities, if
necessary, in order to increase usage of the pages.
2.4 Marketing by NETTAXI. Throughout the term of this Agreement,
-----------------------
NETTAXI shall use reasonable commercial efforts to market the SpinRecords.com
Brand Features in order to maximize the number of visitors to the
SpinRecords.com Pages in accordance with the Statement of Work. The parties
shall review the Statement of Work and Spinrecords.com's marketing activities on
a quarterly basis in order to assess the performance and agree upon additional
activities, if necessary, in order to increase usage of the pages.
2.5 Additional Statements of Work. If the parties hereto desire to
--------------------------------
engage each other for additional services which are not included in the
Statement of Work and which do not constitute merely a revision or modification
of the Statement of Work, the parties shall in good faith negotiate additional
Statements of Work, each of which upon signing shall be deemed a part of this
Agreement. Additional Statements of Work shall be entered into by mutual
agreement between NETTAXI and SpinRecords.com and shall be substantially in the
form of the Statement of Work attached hereto. Each Statement of Work shall be
signed by authorized representatives of the parties. This Agreement may cover
more than one Statement of Work at any given time.
3. Licenses AND OWNERSHIP.
3.1 Licenses by NETTAXI to SpinRecords.com. NETTAXI hereby grants to
-----------------------------------------
SpinRecords.com a non-exclusive, worldwide, nontransferable, revocable, royalty
free license to use the NETTAXI Brand Features as the same may be modified from
time to time for the purposes of this Agreement
3.2 Licenses by SpinRecords.com to NETTAXI. SpinRecords.com hereby
-------------------------------------------
grants NETTAXI a nonexclusive, worldwide, nontransferable, revocable, royalty
free license to display and distribute the, and make derivative works from the
SpinRecords.com Brand Features and any enhancements, modifications or
improvements thereto as necessary to carry out the terms of this Agreement.
3.3 Ownership by NETTAXI. NETTAXI shall own all right, title, and
----------------------
interest in the NETTAXI Brand Features, the NETTAXI Pages and all Intellectual
Property Rights therein, including any derivatives, improvements thereof,
excluding the SpinRecords.com Brand Features
3.4 Ownership by SpinRecords.com. Except as otherwise set forth below,
-----------------------------
SpinRecords.com shall own all right, title, and interest in the SpinRecords.com
Brand Features and the SpinRecords.com Pages and all Intellectual Property
Rights therein, including any derivatives, improvements thereof, excluding the
NETTAXI Brand Features.
3.5 Impressions. Neither party nor its employees shall take actions
----------
which will artificially increase the number of Impressions on the party's web
pages. For example, a party's employees shall not repeatedly access the other
party's web pages.
4. PAYMENT
4.1 Payment. In consideration of the duties and obligations of the
-------
parties hereto, SpinRecords.com shall pay NETTAXI in the manner set forth in the
Statement of Work.
5. REPRESENTATIONS AND WARRANTIES.
5.1 Representations and Warranties of SpinRecords.com. SpinRecords.com
--------------------------------------------------
hereby represents and warrants to NETTAXI that: (i) SpinRecords.com has the full
power and authority to enter into this Agreement and to carry out its
obligations under this Agreement; (ii) SpinRecords.com has the full power and
authority to grant the rights and licenses granted to NETTAXI in this Agreement;
and (iii) SpinRecords.com owns the SpinRecords.com Brand Features.
2
<PAGE>
5.2 Representations and Warranties of NETTAXI. NETTAXI hereby
---------------------------------------------
represents and warrants to SpinRecords.com that (i) NETTAXI has the full power
and authority to enter into this Agreement and to carry out its obligations
under this Agreement; (ii) NETTAXI has the full power and authority to grant the
rights and licenses granted to SpinRecords.com in this Agreement; and (iii)
NETTAXI owns the NETTAXI Brand Features.
5.3 THE NETTAXI SERVICES FURNISHED AS A RESULT OF OR UNDER THIS
AGREEMENT ARE PROVIDED ON AN "AS IS" BASIS, WITHOUT ANY WARRANTIES OR
REPRESENTATIONS EXPRESS, IMPLIED OR STATUTORY; INCLUDING, WITHOUT LIMITATION,
WARRANTIES OF QUALITY, PERFORMANCE, NONINFRINGEMENT, MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE. NOR ARE THERE ANY WARRANTIES CREATED BY A COURSE OF
DEALING, COURSE OF PERFORMANCE OR TRADE USAGE. NETTAXI DOES NOT WARRANT THAT
THE SERVICES, WILL MEET SPINRECORDS.COM'S OR ANY END USERS NEEDS OR BE FREE FROM
ERRORS, OR THAT THE OPERATION OF ITS WEB PAGES WILL BE UNINTERRUPTED. THE
FOREGOING EXCLUSIONS AND DISCLAIMERS ARE AN ESSENTIAL PART OF THIS AGREEMENT.
6. CONFIDENTIALITY.
6.1 Agreement as Confidential Information. The parties shall treat the
--------------------------------------
terms and conditions and the existence of this Agreement as Confidential
Information. Each party shall obtain the other's consent prior to any
publication, presentation, public announcement or press release concerning the
existence or terms and conditions of this Agreement.
6.2 Confidential Information. "Confidential Information" means all
-------------------------
information identified in written or oral format by the Disclosing Party as
confidential, trade secret or proprietary information, and, if disclosed orally,
summarized in written format within thirty (30) days of disclosure. "Disclosing
Party" is the party disclosing Confidential Information. "Receiving Party" is
the party receiving Confidential Information. The Receiving Party shall not
disclose the Confidential Information to any third party other than persons in
the direct employ of the Receiving Party who have a need to have access to and
knowledge of the Confidential Information solely for the purpose authorized
above. Each party shall take appropriate measures by instruction and agreement
prior to disclosure to such employees to assure against unauthorized use or
disclosure. The Receiving Party shall have no obligation with respect to
information which (i) was rightfully in possession of or known to the Receiving
Party without any obligation of confidentiality prior to receiving it from the
Disclosing Party; (ii) is, or subsequently becomes, legally and publicly
available without breach of this Agreement; (iii) is rightfully obtained by the
Receiving Party from a source other than the Disclosing Party without any
obligation of confidentiality; (iv) is disclosed by the Receiving Party under a
valid order created by a court or government agency, provided that the Receiving
Party provides prior written notice to the Disclosing Party of such obligation
and the opportunity to oppose such disclosure. Upon written demand of the
Disclosing Party, the Receiving Party shall cease using the Confidential
Information and return the Confidential Information and all copies, notes or
extracts thereof to the Disclosing Party within seven (7) days of receipt of
notice.
7. INDEMNITY AND LIMITATION OF LIABILITY.
7.1 Indemnification by Spinrecords.com. SpinRecords.com shall defend,
------------------------------------
indemnify and hold NETTAXI harmless from any and all damages, liabilities, costs
and expenses (including, but not limited to reasonable attorneys' fees) incurred
by NETTAXI as a result of (i) any breach of this Agreement; (ii) any claim that
the SpinRecords.com Brand Features or any part thereof, infringes or
misappropriates any Intellectual Property Right of a third party; (iii) any
claim arising out of NETTAXI's display of the SpinRecords.com Brand Features; or
(iv) the operation of the SpinRecords.com Pages. NETTAXI shall provide
SpinRecords.com with written notice of the claim and permit SpinRecords.com to
control the defense, settlement, adjustment or compromise of any such claim.
NETTAXI may employ counsel at its own expense to assist it with respect to any
such claim; provided, however, that if such counsel is necessary because of a
conflict of interest of either SpinRecords.com or its counsel or because
SpinRecords.com does not assume control, SpinRecords.com will bear the expense
of such counsel.
7.2 Indemnification by NETTAXI. NETTAXI shall defend, indemnify and
----------------------------
hold SpinRecords.com harmless from any and all damages, liabilities, costs and
expenses (including, but not limited to reasonable attorneys' fees) incurred by
SpinRecords.com as a result of (1) any breach of this Agreement; (ii) any claim
that the NETTAXI Brand Features or any part thereof, infringes or
misappropriates any Intellectual Property Right of a third party; or (iii) any
claim arising out of Spinrecords.com's display of the NETTAXI Brand Features
SpinRecords.com shall provide NETTAXI with written notice of the claim and
permit NETTAXI to control the defense, settlement, adjustment or compromise of
any such claim. SpinRecords.com may employ counsel at its own expense to assist
it with respect to any such claim; provided, however, that if such counsel is
necessary because of a conflict of interest of either NETTAXI or its counsel or
because NETTAXI does not assume control, NETTAXI will bear the expense of such
counsel.
7.3 Limitation of Liability. EXCEPT AS SET FORTH IN SECTION 6 AND 7.1,
------------------------
UNDER NO CIRCUMSTANCES WILL EITHER PARTY BE LIABLE TO THE OTHER UNDER ANY
CONTRACT, STRICT LIABILITY, NEGLIGENCE OR OTHER LEGAL OR EQUITABLE THEORY, FOR
ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES OR LOST PROFITS IN CONNECTION WITH THE
SUBJECT MATTER OF THIS AGREEMENT.
3
<PAGE>
8. TERM AND TERMINATION
8.1 Term of Agreement. This Agreement shall be effective upon the
-------------------
Effective Date and shall remain in force for a period of one (1) year, and shall
be automatically renewed for successive periods of one (1) year unless otherwise
terminated as provided herein.
8.2 Convenience. NETTAXI may terminate this Agreement at any time for
-----------
its convenience, for no reason or for any reason, upon sixty (60) days prior
written notice to SpinRecords.com. In the event of such termination,
Spinrecords.com shall be entitled to receive and retain all payments made or
payable by NETTAXI prior to the date of termination. SpinRecords.com may
terminate this Agreement for no reason or for any reason upon sixty (60) days
prior written notice to NETTAXI.
8.3 Termination for Cause. This Agreement may be terminated by a party
----------------------
for cause immediately upon the occurrence of and in accordance with the
following:
(a) Insolvency Event. Either may terminate this Agreement by
delivering written notice to the other party upon the occurrence of any of the
following events: (i) a receiver is appointed for either party or its property;
(ii) either makes a general assignment for the benefit of its creditors; (iii)
either party commences, or has commenced against it, proceedings under any
bankruptcy, insolvency or debtor's relief law, which proceedings are not
dismissed within sixty (60) days; or (iv) either party is liquidated or
dissolved.
(b) Change of Control. In the event more that there is a change in
ownership representing fifty percent (50%) or more of the equity ownership of
either party, the other party may, at its option, terminate this Agreement upon
written notice.
(c) Default. Either party may terminate this Agreement effective
upon written notice to the other if the other party violates any covenant,
agreement, representation or warranty contained herein in any material respect
or defaults or fails to perform any of its obligations or agreements hereunder
in any material respect, which violation, default or failure is not cured within
thirty (30) days after notice thereof from the non-defaulting party stating its
intention to terminate this Agreement by reason thereof.
8.4 Survival of Rights and Obligations Upon Termination. Sections 6 and
---------------------------------------------------
7 shall survive termination or expiration of this Agreement. Notwithstanding
anything in the foregoing to the contrary, in the case of termination by NETTAXI
for cause pursuant to Section 8.3, NETTAXI shall not be required to pay any fee
to SpinRecords.com after termination.
8.5 Return of Materials Upon Termination. On or before ten (10) days
---------------------------------------
after the termination of this Agreement, SpinRecords.com shall deliver to
NETTAXI all NETTAXI Confidential Information and NETTAXI Brand Features,
including but not limited to all work product, diagrams, designs and schematics
in Spinrecords.com's possession and NETTAXI.com shall deliver to SpinRecords.com
all SpinRecords.com Confidential Information and SpinRecords.com Brand Features,
including but not limited to all work product, diagrams, designs and schematics
in Nettaxi.com's possession
9. MISCELLANEOUS
9.1 Force Majeure. Neither party shall be liable to the other for
--------------
delays or failures in performance resulting from causes beyond the reasonable
control of that party, including, but not limited to, acts of God, labor
disputes or disturbances, material shortages or rationing, riots, acts of war,
governmental regulations, communication or utility failures, or casualties.
9.2 Relationship of Parties. The parties are independent contractors
-------------------------
under this Agreement and no other relationship is intended, including a
partnership, franchise, joint venture, agency, employer/employee, fiduciary,
master/servant relationship, or other special relationship. Neither party shall
act in a manner which expresses or implies a relationship other than that of
independent contractor, nor bind the other party.
9.3 No Third Party Beneficiaries. Unless otherwise expressly provided,
-----------------------------
no provisions of this Agreement are intended or shall be construed to confer
upon or give to any person or entity other than NETTAXI and SpinRecords.com any
rights, remedies or other benefits under or by reason of this Agreement.
9.4 Equitable Relief. Each party acknowledges that a breach by the
-----------------
other party of any confidentiality or proprietary rights provision of this
Agreement may cause the non-breaching party irreparable damage, for which the
award of damages would not be adequate compensation. Consequently, the
non-breaching party may institute an action to enjoin the breaching party from
any and all acts in violation of those provisions, which remedy shall be
cumulative and not exclusive, and a party may seek the entry of an injunction
enjoining any breach or threatened breach of those provisions, in addition to
any other relief to which the non-breaching party may be entitled at law or in
equity.
4
<PAGE>
9.5 Attorneys' Fees. In addition to any other relief awarded, the
----------------
prevailing party in any action arising out of this Agreement shall be entitled
to its reasonable attorneys' fees and costs.
9.6 Notices. Any notice required or permitted to be given by either
-------
party under this Agreement shall be in writing and shall be personally delivered
or sent by a reputable overnight mail service (e.g., Federal Express), or by
first class mail (certified or registered), or by facsimile confirmed by first
class mail (registered or certified), to the party at the address indicated
above. Notices will be deemed effective (i) three (3) working days after
deposit, postage prepaid, if mailed, (ii) the next day if sent by overnight
mail, or (iii) the same day if sent by facsimile and confirmed as set forth
above.
9.7 Assignment. Neither NETTAXI or SpinRecords.com shall assign its
----------
respective rights or delegate its obligations hereunder, either in whole or in
part, whether by operation of law or otherwise, without the prior written
consent of the other party. Any attempted assignment or delegation without the
other party's written consent will be void.
9.8 Waiver and Modification. Failure by either party to enforce any
-------------------------
provision of this Agreement will not be deemed a waiver of future enforcement of
that or any other provision. Any waiver, amendment or other modification of any
provision of this Agreement will be effective only if in writing and signed by
the parties.
9.9 Severability. if for any reason a court of competent jurisdiction
------------
finds any provision of this Agreement to be unenforceable, that provision of the
Agreement will be enforced to the maximum extent permissible so as to effect the
intent of the parties, and the remainder of this Agreement will continue in full
force and effect.
9.10 Controlling Law and Jurisdiction. This Agreement and any action
-----------------------------------
related thereto shall be governed, controlled, interpreted and defined by and
under the laws of the State of California and the United States, without regard
to the conflicts of laws provisions thereof. Unless waived by NETTAXI (which it
may do in its sole discretion) the exclusive jurisdiction and venue of any
action with respect to the subject matter of this Agreement shall be the
Superior Court of California for the County of Santa Clara or the United States
District Court for the Northern District of California and each of the parties
hereto submits itself to the exclusive jurisdiction and venue of such courts for
the purpose of any such action. The parties specifically disclaim the UN
Convention on Contracts for the International Sale of Goods.
9.11 Headings. Headings used in this Agreement are for ease of
--------
reference only and shall not be used to interpret any aspect of this Agreement.
9.12 Entire Agreement. This Agreement, including all exhibits which are
----------------
incorporated herein by reference, constitutes the entire agreement between the
parties with respect to the subject matter hereof, and supersedes and replaces
all prior and contemporaneous understandings or agreements, written or oral,
regarding such subject matter.
9.13 Counterparts. This Agreement may be executed in two counterparts,
------------
each of which shall be an original and together which shall constitute one and
the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement by
persons duly authorized as of the date and year first above written.
NETTAXI: NETTAXI ONLINE COMMUNITIES, INC.
By: /s/
---------------------------------------------
Its: Executive Vice President Sales & Marketing
--------------------------------------------
Solutions Media SOLUTIONS MEDIA, INC.
-----------------------
By: /s/
---------------------------------------------
Its: President
---------------------------------------------
TABLE OF EXHIBITS
EXHIBIT A - SPINRECORDS.COM BRAND FEATURES
EXHIBIT B - NETTAXI BRAND FEATURES
EXHIBIT C - STATEMENT OF WORK
5
<PAGE>
EXHIBIT A
SPINRECORDS.COM BRAND FEATURES
1. Service Marks:
"SpinRecords.com"
"SpinRadio"
"Spin TV"
"Local Spin"
"Spin Chat"
"Gig-a-board"
"Spin Cuts"
"Spin Charts"
"Join the evolution"
"The promise of music on the Internet delivered"
2. SpinRecords.com collateral and dress - SpinRecords.com color scheme,
fonts and general "look and feel"
3. SpinRecords.com logos
4. "Anything but that" cartoon series
5. SpinRecords.com source materials
6. SpinRecords.com website
6
<PAGE>
EXHIBIT B
NETTAXI BRAND FEATURES
1. Service Marks:
"NETTAXI"
"NETTAXI.COM"
"NETTAXI ONLINE COMMUNITIES"
"INTERNET THE CITY"
"DRIVING YOUR INTERNET EXPERIENCE"
2. Trade dress - Nettaxi color scheme and checkered motif; "look
and feel"
3. Nettaxi logos
4. Nettaxi source materials
5. The Website
7
<PAGE>
EXHIBIT C
STATEMENT OF WORK
1. GENERAL
This is a Statement of Work under the Co-Branding Agreement by and between
NETTAXI Online Communities, Inc. ("NETTAXI") and Solutions Media, Inc.,
("SpinRecords.com") dated effective as of Nov. 5, 1999.
2. PROJECT MANAGERS.
NETTAXI: Will Richards SPINRECORDS.COM: Criona Mclaughlin
2165 S. Bascom Avenue 11440 West Bernardo Ct
Campbell, California 95008 San Diego, California 92127
Phone: (408) 879-9880 Phone: (619)451-3223
Fax: (408) 879-9907 Fax: (619)451-2373
3. BRANDING METHODS
Spinrecords.com and Nettaxi.com will enter into a multi-phase launch of a
co-branded community for Nettaxi, and the implementation of community services
for Spinrecords.com members. The following defines the agreement after the final
phase. The individual phases are specified following the Marketing Section of
the Statement of Work.
1) SpinRecords.com will develop a co-branded site showing the Nettaxi.com
logo. The co-branding shall not include SpinRadioTM, SpinTVTM, feature
modules, and Spin branded charts. All other navigation bar features shall
be modified to the co-brand including localnettaxi, and nettaxichat. The
spinwares and spinstore will be modified to include licensed content
purchased directly from Spinrecords.com and to eliminate products that will
compete with the Nettaxi store.
2) Spinrecords.com will incorporate from the navigation bar a link from
nettaxistores to the Nettaxi commerce site.
3) The co-branded nettaximusic store will contain spingear, spingallery,
spinmusic, and Kingdom Skateboard products and services. Spin agrees to pay
Nettaxi a 5% commission of the gross sales price on all transactions.
4) Spinrecords.com will maintain the Spin logo on the site in a corner of
their choice.
5) Nettaxi web based e-mail will replace spinmail on the co-branded site.
6) Nettaxi's search engine shall be the default search engine on the
co-branded site and on the Spinrecords.com homesite, with the exception
that, in the event Spinrecords.com provides its content to or otherwise
develops any co-branded sites with any ISP, Internet Portal or other
entity, Spinrecords.com shall not be required to employ the Nettaxi search
engine. In all cases in which the Nettaxi search engine is employed, the
search shall first deliver results found on the Spinrecords.com website.
The search feature shall have the tag line "Driven by Nettaxi" underneath
the search bar.
7) Nettaxi shall cause its search engine to search and deliver results from
the SpinRecords.com site and co-branded site as one of the top results for
all searches for related words on the co-branded site, the SpinRecords.com
homesite and the Nettaxi.com site. Related words shall include, but not be
limited to: "music," "mp3," "independent artist/music" and "CD."
8) Nettaxi will create a music template for the Nettaxi homepage builder.
Every registered member of Spinrecords.com and Nettaximusic will be
provided a dynamically generated home page. Spinrecords.com will submit to
Nettaxi the existing list of Spinrecords.com members from which a homepage
shall be generated.
9) Nettaximusic and Spinrecords.com will share registered users by
synchronizing the databases for registered users. Nettaxi will maintain
unique ID's for each community home page built in the Spinrecords.com
domain and Nettaximusic.com domain (for the purpose of the auto-generation
of fan page templates). This synchronization shall not include any users
that arrive at SpinRecords.com through any other co-branded site or through
any other means of co-branding/co-marketing with any other ISP, Website or
other entity.
10) Nettaxi will develop a link from the Nettaxi Arts & Entertainment area for
the co-branded site.
11) Nettaxi will add Nettaximusic to the street sign on the A&E page.
12) Nettaxi will make the word "music" on the splash page, under A&E a link,
and have it link to nettaxi.spinrecords.com. the co-branded site.
13) The co-branded site will have the Nettaxi mp3 player as an available mp3
player on the site.
14) Spinrecords.com will place the Nettaxi logo on promotional CDROM's and
Samplers that contain the Nettaxi mp3 player or site banners. Banners on
CDROM's will link straight to Nettaxi and Nettaximusic.
15) Nettaxi will include the Spinrecords.com logo on promotional CDROM's
containing music provided Spinrecords.com.
16) Spinrecords.com will provide a link from all artists' pages to the
co-branded registration site for fans to produce fan pages.
17) Nettaxi.com and Spinrecords.com will develop ability for all registered
users of the co-branded site to achieve one-click buying on the co-branded
site whether purchasing from Nettaxi's store or the Spinstore.
8
<PAGE>
4. MARKETING EFFORTS
1) Spinrecords.com will sell ad space on the co-branded site, in accordance
with the agreement, within 30 days of the Effective Date.
2) Both Parties agree to develop a Nettaxi co-branded CD featuring
Nettaximusic.com. Both parties will share the production costs of the
Nettaximusic.com Co-Branded CD. The per unit cost shall be 50 cents or
less, unless both parties agree otherwise.
3) Nettaxi will develop a community based affinity model for music that
features SpinRecords.com artists.
4) Nettaxi will provide in-house advertising to promote the co-branded music
site.
5) Spinrecords.com will engage with Nettaxi as an -advertising sponsor
promoting the co-branded site with each party contributing a monthly
investment of not less than $20,000 per month, in cash expenditure or
in-kind contribution toward the marketing effort(s).
6) SpinRecords.com will promote Nettaximusic.com as a music affiliate in their
non-traditional street marketing methods, to include flyer's created
in-house for Spin Bands, will have the logo of Nettaxi.com Music in-order
that consumers see alternate choices to find the bands music.
7) Both parties agree to include advertisements for the other party in the
advertising included with their web-based e-mail offered to their users.
8) Spinrecords.com will grant Nettaxi the rights to use the artist's likeness
in promotions of the co-branded site.
9) Nettaxi.com agrees to participate in Spinrecords.com fourth quarter
promotional plans by procuring $250,000 worth of co-promotional placement
in Spinrecords advertising targeted towards colleges, extreme sports and
other mutually agreed upon target audiences.
10) Spinrecords.com agrees to purchase in the fourth quarter, $250,000 worth of
advertising and sponsorship space within the Nettaxi site for promotion of
the co-branded and Spinrecords.com community.
PHASED ROLL OUT PLAN
PHASE I: NOVEMBER 8TH
The existing site located at Spinrecords.com/Nettaxi shall be launched - target
date one week from agreement date. This site shall contain the web based e-mail
from Nettaxi. This site shall also use Spinstore and Spinware as it currently
exists on the site.
Nettaxi will begin development of the music template for the home page builder.
Spinrecords will submit their existing list of members to Nettaxi to integrate
the homepage builder database and resolve duplicate ID's existing between
Nettaxi and Spinrecords member registration.
Nettaxi and Spinrecords will integrate their respective registrations to allow
both companies to synchronize their registered users from the co-branded site.
Spinrecords can announce the partnership in a press release the day the
co-branded site launches. This press release will detail the co-branded
relationship.
PHASE II: NOVEMBER 22ND
Community home pages will be available to all members of Nettaximusic.com and
Spinrecords.com. Spinrecords.com will announce to their existing membership the
existence of their new homepage, provide them with their Unique URL and promote
their ability to develop a unique web site.
Nettaxi will announce the same ability to all registered members of
Nettaximusic.com.
Nettaxi's search engine will be launched on the Spinrecords.com domain.
Nettaxi's e-commerce offering will be launched on the co-branded site.
Spinrecords.com e-comnerce offerings will be reduced to provide licensed
merchandise and content and any additional products mutually agreed upon by
Nettaxi.com and Spinrecords.com.
Both companies will announce their users ability to shop on the co-branded site
using one-click buying. Each member can move between the stores on the co-brand
site and order in each individual store.
9
<PAGE>
PHASE III: JANUARY 1, 2000
Nettaxi launches citizen and small business e-commerce offering for all
community sites. This feature will allow current Nettaxi home page web sites to
integrate e-commerce offerings from their own products and products from the
Nettaxi store.
5. PAYMENT
PERCENTAGE OF ADVERTISING REVENUE
5.1 "SpinRecords.com's Advertising Revenue" means the gross revenue
from advertising invoiced by SpinRecords.com in a calendar quarter for
advertising by third parties on the SpinRecords.com Pages, less any commissions
not to exceed 35%.
5.2 "SpinRecords.com's AR Share" means the number of Impressions on the
SpinRecords.com Pages by Users arriving through the Co-branded NETTAXI Pages in
a calendar quarter divided by the total number of Impressions on the
SpinRecords.com Pages by all Users in that calendar quarter.
5.3 "NETTAXI Advertising Revenue" means the gross revenue from
advertising invoiced by NETTAXI in a calendar quarter for advertising by third
parties on the NETTAXI Pages, less any commissions.
5.4 "NETTAXI's AR Share" means the number of Impressions on the NETTAXI
Pages by Users arriving through the Co-branded SpinRecords.com Pages in a
calendar quarter divided by the total number of Impressions on the NETTAXI Pages
by all Users in that calendar quarter.
5.5 SpinRecords.com Rate. In full consideration for the rights granted
---------------------
by NETTAXI, SpinRecords.com agrees to pay NETTAXI fifty (50%) percent of ad
revenue at an average rate no lower then $6.50 per one thousand impressions
(CPM) payable to NETTAXI which results when the SpinRecords.com Advertising
Revenue is multiplied by SpinRecords.com's AR Share. SpinRecords.com shall be
responsible for payment of all taxes based on the Advertising Revenue except
taxes based on NETTAXI's income.
5.6 NETTAXI Rate. N/A.
-------------
5.7 Payment Schedule. The parties shall make such payments within
-----------------
thirty (30) days of the end of each calendar quarter for the Advertising Revenue
invoiced during such calendar quarter.
5.8 Records. SpinRecords.com agrees to keep accurate books of account
-------
and records at its principal place of business covering all Advertising Revenues
and associated commissions. Upon reasonable notice of not less than seven (7)
business days, but in no event more than once per year (unless the immediately
preceding audit showed a material underpayment), NETTAXI shall have the right,
subject to suitable confidentiality measures, to cause a certified public
accountant to inspect those portions of the books of account and records which
relate to the royalties owed NETTAXI, to confirm that the correct amount owing
NETTAXI under this Agreement has been paid. SpinRecords.com shall maintain such
books of account and records which support each statement for at least two years
after the termination or expiration of this contract or after the final payment
made by SpinRecords.com to NETTAXI, whichever is later.
2: PER CUSTOMER FEE
1. SpinRecords.com Payment. For each User that accesses the co-branded
------------------------
site and becomes a paying customer on the co-branded site, SpinRecords.com
agrees to pay a fee of five (5%) percent of the gross sale.
2. NETTAXI Payment. N/A.
----------------
3. Payment Terms. All fees will be paid on or before fifteen (15) days
--------------
after the end of the month in which the party has received payment
4. Audit Rights. SpinRecords.com shall maintain for a period of two
-------------
(2) years after the end of the year to which they pertain, complete records of
it's customers in order to calculate and confirm SpinRecords.com's obligations
hereunder. Upon reasonable prior notice, NETTAXI will have the right,
exercisable not more than once every twelve (12) months, to appoint an
independent accounting firm or other agent reasonably acceptable to
SpinRecords.com, at NETTAXI'S expense, to examine such books, records and
accounts during SpinRecords.com's normal business hours to verify the amounts
due by SpinRecords.com to NETTAXI herein, subject execution of NETTAXI's
standard confidentiality agreement by the accounting firm or agent; provided,
however, that execution of such agreement will not preclude such firm from
reporting its results to NETTAXI. In the event such audit discloses an
underpayment or overpayment of royalties due hereunder, the appropriate party
will promptly remit the amounts due to the other party. If any such audit
discloses a shortfall in payment to NETTAXI of more than five percent (5%) for
any quarter, SpinRecords.com agrees to pay or reimburse NETTAXI for the expenses
of such audit.
10
<PAGE>
