Agreement For Services - Frankel & Co. and ARTISTdirect Inc.
AGREEMENT FOR SERVICES
This agreement (the "Agreement") is made as of this 13th day of June, 2002 (the
"Effective Date") by and between Frankel & Company, an Illinois corporation
("Frankel"), and ARTISTdirect, Inc., a Delaware corporation (the "Provider" or
"AD").
1. Purpose of Agreement: The purpose of this Agreement is to set forth the
rights, responsibilities, duties, obligations, promises, covenants and
agreements between Frankel and Provider, in connection with the AT&T
Wireless Services, Inc. ("AWS") promotion identified as the "Ultimate
Experiences" promotion (the "Project").
2. Nature of Services: Frankel, as a limited agent for AWS, is responsible
for managing and administering the Project, including the arrangement of
those prizes and awards which will be given to winning participants in
the Project. Provider, as the provider of those certain services
("Services") identified on Exhibit A, attached hereto, upon execution of
this Agreement, will become responsible for procuring, arranging,
overseeing, managing, and operating certain of the "Ultimate Experience"
prizes and/or awards, as more particularly set forth on Exhibit A, and
for providing certain content for publication on a Frankel directed
internet website (the "Microsite").
3. Compensation: Subject to Provider's compliance with all of the material
terms and conditions of this Agreement, and for and in consideration of
the Services to be provided to Frankel and in connection with the
Project, Provider shall be compensated as set forth on Exhibit B,
attached hereto. Payment of compensation to the Provider, by Frankel, is
contingent upon rendering to Frankel an invoice containing sufficient
detail of the fees, costs and expenses, if any, incurred and
reimbursable pursuant to the terms and provisions of this Agreement.
4. Provider's Additional Obligations:
(a) Insurance: Provider shall be required to maintain appropriate
insurance coverage as set forth on Exhibit C, attached hereto, as
Frankel shall reasonably require, in connection with the
provision of the Services, and shall be required to (I) name
Frankel and AWS as additional insureds with respect to the
coverage required on Exhibit C, attached hereto and (II) provide
to Frankel an insurance certificate specifying the levels of
coverage and such other information as Frankel shall reasonably
require.
(b) Confidentiality: Provider and Frankel acknowledge and agree that
during the term of this Agreement Frankel and Provider may have
access to certain of each other's proprietary or confidential
business information. Frankel and Provider specifically agree to
maintain a strict policy of confidentiality and nondisclosure for
all business and trade secrets or other confidential or
proprietary information of the other party. The parties agree,
therefore, to the extent possible, to so designate information it
considers proprietary or confidential at the time such
information is provided to the other party. Neither party will
misuse or appropriate such proprietary or confidential business
information. Further, the
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parties specifically acknowledge that the terms of this Agreement
are confidential and neither shall disclose any details of this
Agreement, unless both parties agree; except that either party
may disclose that Provider is providing certain services to
Frankel, and either party may disclose the public details of any
project or promotion upon its execution. This provision shall
survive the expiration or termination of this Agreement. Provider
acknowledges and agrees that (I) it executed that certain
Nondisclosure Agreement between Provider and AWS dated April 17,
2001 (the "NDA") as set forth on Exhibit D, attached hereto, and
(II) its treatment of any AWS Confidential Information (as such
term is defined in the NDA), whether obtained from AWS, Frankel,
or otherwise, will be governed by the NDA.
(c) Indemnity: Provider shall indemnify, defend and hold harmless
Frankel and AWS, their respective employees, officers, directors,
agents, affiliates, subsidiaries and representatives
(collectively, the "Indemnified Parties" and individually, an
"Indemnified Party"), against any and all claims, losses,
demands, damages, judgments, liabilities, costs and expenses,
including reasonable attorneys' fees, which the Indemnified Party
may incur as a result of claims in any form by third parties
arising out of or resulting from: (I) the Services performed
and/or deliverables provided pursuant to this Agreement,
(II) Provider's breach of AWS's privacy policy; (III) the
Provider's breach or failure to fulfill any of the terms and
conditions of this Agreement, whether due to the Provider's acts
or failure to act; (IV) the Provider's failure to pay all wages,
salaries, fringe benefits and other compensation of or claimed by
Provider employees including, without limitation, contributions
to any employee benefit, medical or savings plan and all payroll
taxes with respect to such employees including without
limitation, the withholding of all federal, state, and local
income taxes, FICA, unemployment taxes and all other payroll
taxes; (V) from the allegation of a violation of any state, local
or federal law regarding performance of games, contests and
sweepstakes for the failure of a prize to be awarded; and
(VI) Provider's public statements. The foregoing obligations are
conditioned on the Indemnified Party: (i) giving Provider written
notice of the relevant claim, (ii) cooperating with Provider, at
the Provider's expense, in the defense of such claim, and (iii)
giving Provider the right to control the defense and settlement
of any such claim, except that Provider shall not enter into any
settlement that affects the Indemnified Party's rights or
interest without the Indemnified Party's prior written approval.
The Indemnified Party shall have the right to participate in the
defense at its expense.
(d) Publicity: Except as necessary to fulfill its obligations
hereunder, Provider shall issue no public statements, make any
public comments, or respond to any inquiries from any third party
regarding the Project except with the written authorization of
Frankel. Provider's breach of this provision shall be deemed
cause for immediate termination of the Agreement.
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(e) Copyright:
(i) Ownership. Except with respect to third party rights of
which Provider has informed Frankel in writing in
compliance with Section 13, all tangible or intangible
property developed or prepared for Frankel and/or AWS or
delivered to Frankel and/or AWS by Provider for its use,
during this Agreement, and solely for the obligations set
forth in this Agreement, including, but not limited to,
plans, sketches, layouts, copy, promotions, commercials,
films, photographs, illustrations, transcriptions,
software, film, video, digital images, and all other
literary and artistic materials, finished or unfinished,
whether created by Provider, Frankel and/or AWS or a third
party supplier hired specifically to fulfill the
obligations set forth herein, or any combination thereof,
and all drafts and versions thereof, whether used or
unused ("Advertising Properties"), shall be and remain the
exclusive property of AWS. Neither Provider nor any of
its third party suppliers shall permit any party (other
than Frankel (with AWS's permission) and/or AWS) to use
any Advertising Properties. Provider shall place AWS'
copyright notice on each Advertising Property in such
locations and styles as AWS may direct. Upon Frankel
and/or AWS' request, with respect to materials developed
as work for hire hereunder, Provider will prepare and file
applications for copyright registration at Frankel and/or
AWS' expense and in AWS' name.
(ii) Work Made-For-Hire. Provider acknowledges and agrees that
all copyrightable aspects of Advertising Properties to be
owned by AWS above are deemed "works made-for-hire" as
that term is defined in Section 101 of the United States
Copyright Act, 17 U.S.C. Section 101 (or any successor
thereto), that AWS is deemed the author or creator of the
Advertising Properties, and that AWS is the exclusive
owner of all right, title and interest, including the
copyrights and any and all other intellectual property
rights, in and to the Advertising Properties. If, for any
reason any of the Advertising Properties are not found to
have been created as works made-for-hire, Provider hereby
assigns all its right, title and interest in and to the
Advertising Properties to AWS. Provider shall execute any
instruments that, in the sole judgment and discretion of
AWS, may be deemed necessary to further carry out such
assignment or to protect AWS' rights in the Advertising
Properties ("Assignment Documents").
(iii) Original Work; Third Party Rights. Except with respect to
third party content of which Provider has informed Frankel
in writing in compliance with Section 13, under no
circumstance shall Provider present to Frankel and/or AWS
any element of any Advertising Properties for potential
development and/or execution as Frankel and/or AWS
marketing, advertising or promotion unless (i) the work is
original and Provider knows or should know that no third
party would be able to claim, and no third party claims or
threatens to claim, any ownership right with respect to
the work, or (ii) Provider has fully disclosed in writing
to Frankel
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and/or AWS the rights that must be secured and the
estimated cost, if any, for Frankel and/or AWS' use of the
work, if a third party claims ownership rights with
respect to the work.
(iv) Use of Marks: PRIOR to the first use of any of the other
party's or AWS' trademarks, service marks, symbols, logos
or other identifying marks or signs (hereinafter, "Marks")
in the manner permitted herein, the party using such Marks
shall submit a sample of such proposed use to the other
party, or to AWS for AWS Marks, for its prior written
approval, which shall not be unreasonably withheld or
delayed. AWS will use commercially reasonable efforts to
approve or disapprove any use of its Marks in three
business days. Once a party, or AWS as applicable,
approves a particular use of a Mark, the approval will
remain in effect for such use until withdrawn with
reasonable prior written notice. Notwithstanding the
foregoing, and regardless of any delayed approval, each
party shall strictly comply with all standards with
respect to the other party's and AWS' Marks which may be
furnished by such party from time to time, and all uses of
the other party's or AWS' Marks in proximity to the trade
name, trademark, service name or service mark of any other
person or entity shall be consistent with the standards
furnished by the other party, or AWS as applicable, from
time to time. Further, no party shall create a
combination mark or domain name incorporating or
consisting of one or more Marks of the other party or AWS,
or anything likely to cause confusion with or dilution of
such party's or AWS' Marks. All uses of the other party's
or AWS' Marks shall inure to the benefit of the party
owning such Mark.
(f) Web-linking activities: Provider will only link to the AWS
website in conjunction with the Provider's performance of the
Services and in a manner approved by AWS. Provider will not link
to any ATTWS website in any other manner. If AWS shall decide to
terminate any link between Provider and AWS, AWS or Frankel will
notify the Provider and, immediately upon such notice, the
Provider shall terminate such link.
(g) Service Prohibitions: Provider is responsible for ensuring that
materials it provides to Frankel to be posted on the Microsite
(i) do not violate or infringe upon the rights of any third party
(including, for example, copyrights, trademarks, privacy, or
other personal or proprietary rights), (ii) are not unlawful,
harmful, threatening, defamatory, obscene, harassing or racially
objectionable, (iii) do not depict sexually explicit images, and
(iv) do not promote violence, discrimination, or illegal
activities. Immediately upon notice to the Provider by Frankel
if Frankel determines the materials provided by Provider posted
or published thereon, violates this Section 4.(g). Provider shall
shut down any link to the content until such time as Frankel
shall have determined that the violation has been remedied and
shall have notified Provider that the violation has been
remedied, as which time, Provider will promptly restore such
link to the content.
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(h) Microsite Data collection: Frankel will provide Provider with
information collected from third parties who enter the "Ultimate
Experience" contests managed by Provider.
(i) Microsite Security: To the extent that Provider shall in any
fashion operate any Microsite in connection with the Project,
Provider will use its best efforts to maintain the security of
all Microsite users, including, but not limited to, implementing
procedures to prevent Provider or third parties who use the
Microsite from sending or transmitting unsolicited data or
messages or viruses to users. Each party will immediately notify
the other party if it knows or has reason to know that any such
unsolicited data, messages or viruses are being sent to users and
Provider agrees to use its best efforts to prevent and/or block
any such unsolicited data, messages or viruses from being sent to
users.
(j) Content Clearance: Provider understands and agrees that in no
event will Provider implement, on the Microsite, any bulletin
boards, message boards, chat rooms, or other separate
communications facilities related to the Microsite, without the
written approval of AWS received in advance.
(k) Privacy Policy: During the Term, Provider shall specifically
adhere to, comply with, and be responsible for carrying out the
Services set forth in this Agreement in accordance with the AWS
Privacy Policy, as it may from time to time exist, and as
published from time to time on the AWS website (URL:
http://www.attws.com/privacy).
5. Representations and Warranties
(a) Each party to this Agreement represents and warrants to the other
party that (i) it has the full corporate right, power and
authority to enter into this Agreement and to perform the acts
required of it hereunder; (ii) its execution of this Agreement by
such party and performance of its obligations hereunder, do not
and will not violate any agreement to which it is a party or by
which it is bound; (iii) when executed and delivered, this
Agreement will constitute the legal, valid and binding obligation
of such party, enforceable against it in accordance with its
terms; and (iv) to the best of its knowledge and belief, all
content or other materials served or submitted by it to or
through an AWS sponsored internet website (the "Microsite"),
operated specifically in conjunction with the Project, and as
specified by Provider, will not contain any material that is
obscene, libelous or defamatory, or infringing of any
Intellectual Property Rights or other rights of any third party.
Provider and Frankel, as applicable, represent and warrant that:
(b) Compliance with Laws. Provider will: (i) comply with all federal,
state, and local laws, ordinances, regulations and orders,
including specifically all laws prohibiting harassment or
discrimination of any kind in the workplace and laws relating to
games, sweepstakes, contests and prizes with respect to its
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performance under this Agreement, (ii) file all required reports
relating to such performance (including, without limitation, tax
returns), except for any required reports (including without
limitation, tax returns) relating to games, sweepstakes,
contests, and prizes, (iii) pay all filing fees and federal,
state and local taxes and government assessments applicable to
Provider's business as the same become due, (iv) pay all amounts
required under local, state and federal workers' compensation
acts, disability benefit acts, unemployment insurance acts and
other employee benefit acts when due, (v) maintain in effect
during the term of this Agreement any and all Federal, State and
local licenses and permits which may be required of Provider to
conduct its business, and obtain all permits, including Fire,
Environmental, etc., necessary under this Agreement. Provider
will provide Frankel with such documents and other supporting
materials as Frankel may reasonably request to evidence
Provider's continuing compliance with this Section. Frankel will
not be responsible for any of the payments, obligations, taxes or
benefits set forth in this Section.
(c) Deliverables. The Deliverables, including any Provider
Proprietary Materials included therein, and the exercise by AWS
of its rights hereunder with respect to such items, will not
infringe upon, violate or misappropriate any Intellectual
Property right, contract or other proprietary right or interest
of any third party. "Deliverables" means all materials,
including software programs, designs, files, specifications,
texts, drawings, processes, data, information and documentation
and all rights incident thereto in the products and services
produced pursuant to this Agreement, including all intellectual
property rights and proprietary materials therein, that are
disclosed or delivered by Provider to AWS and/or Frankel under
this Agreement. In addition, all materials provided to Provider
by Frankel will not infringe upon, violate or misappropriate any
Intellectual Property right, contract or other proprietary right
or interest of any third party.
(d) Other Agreements. Neither party's execution, delivery and
performance of this Agreement will violate any employment,
nondisclosure, confidentiality, consulting or other agreement to
which Provider or Frankel, as applicable, is a party or by which
it may be bound.
(e) Performance Standards. Provider shall adhere to the highest
ethical and business standards and shall perform the Services in
a professional and workmanlike manner in accordance with
applicable professional standards, if any.
(f) Performance Warranty. Provider will re-perform, repair, or
replace any Services not in compliance with the warranties in
this Agreement and the Services and deliverables set forth herein
within a reasonable time after the work is performed, at no
additional cost to Frankel, and at no cost to AWS, if such
non-compliance is as a result of Provider's act or failure to
act.
(g) THE EXPRESS WARRANTIES SET FORTH IN THIS AGREEMENT ARE IN LIEU OF
ALL OTHER WARRANTIES, IMPLIED OR STATUTORY, INCLUDING, BUT NOT
LIMITED TO ANY: (A) IMPLIED WARRANTY OF
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MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE; (B) IMPLIED
WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING OR
USAGE OF TRADE; OR (C) ANY OBLIGATION, LIABILITY, RIGHT, REMEDY
OR CLAIM IN TORT, NOTWITHSTANDING ANY FAULT, NEGLIGENCE, STRICT
LIABILITY OR PRODUCT LIABILITY OF CONTENT PROVIDER (WHETHER
ACTIVE, PASSIVE OR IMPUTED) WITH RESPECT TO ANY BUG, DEFECT,
DEFICIENCY OR ERROR IN ANY OF THE FOREGOING.
6. Frankel's Obligations:
(a) Frankel shall reasonably cooperate with Provider to assist in
resolving issues, and providing liaison services between Provider
and AWS, as Frankel shall deem necessary in the circumstances.
Frankel shall also review and monitor all content provided by
Provider for publication on the Microsite and shall review and
make its best efforts to obtain timely AWS approval for all
materials to be published on the Microsite which may be supplied
by Provider hereunder.
(b) Insurance. Frankel shall maintain appropriate insurance coverage
in connection with this Agreement, but in no event less than the
levels set forth on Exhibit C, attached hereto, and Frankel will
ensure that each of Frankel and AWS will name Provider as an
additional insured, and will provide Provider with an insurance
certificate specifying such levels of coverage.
(c) Indemnity. Frankel (the "Indemnifying Party") shall indemnify,
defend and hold harmless Provider, its employees, officers,
directors, agents, affiliates, subsidiaries and representatives
(collectively, the "Indemnified Parties" and individually, an
"Indemnified Party"), against any and all claims, losses,
demands, damages, judgments, liabilities, costs and expenses,
including reasonable attorneys' fees, which the Indemnified Party
may incur as a result of claims in any form by third parties
arising out of or resulting from: (I) the Indemnifying Party's
breach or failure to fulfill any of the terms and conditions of
this Agreement, whether due to the Indemnifying Party's or AWS's
acts or failure to act; (II) the Indemnifying Party's failure to
pay all wages, salaries, fringe benefits and other compensation
of or claimed by Indemnifying Party employees including, without
limitation, contributions to any employee benefit, medical or
savings plan and all payroll taxes with respect to such employees
including without limitation, the withholding of all federal,
state, and local income taxes, FICA, unemployment taxes and all
other payroll taxes; (III) from the allegation of a violation of
any state, local or federal law regarding performance of games,
contests and sweepstakes for the failure of a prize to be
awarded; and (IV) the Indemnifying Party's or AWS's public
statements. The foregoing obligations are conditioned on the
Indemnified Party: (i) giving the Indemnifying Party written
notice of the relevant claim, (ii) cooperating with the
Indemnifying Party, at the Indemnifying Party's expense, in the
defense of such claim, and (iii) giving the Indemnifying Party
the right to control the defense and settlement of any such
claim, except that the Indemnifying Party shall not enter into
any settlement that
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affects the Indemnified Party's rights or interest without the
Indemnified Party's prior written approval. The Indemnified Party
shall have the right to participate in the defense at its
expense.
7. Relationship of the Parties: (a) Independent Contractors. Frankel and
Provider are and shall remain independent contractors, and nothing
contained herein or done pursuant hereto shall be construed to create
any relationship of principal and agent or employer and employee between
any parties or to make them joint venturers. The parties shall each be
solely responsible for the conduct of their respective employees and
agents in connection with the performance of their obligations
hereunder. (b) Third Party Beneficiary. Provider understands and agrees
that AWS shall be considered an intended third party beneficiary of this
Agreement and may enforce the provisions of this Agreement against
Provider as if AWS were a party to this Agreement.
8. Term and Termination:
(a) The Term of this Agreement shall be from the Effective Date of
this Agreement until the later of (I) completion of the winning
participant's or winning participants' participation as set forth
in Exhibit A, attached hereto, or (II) twelve (12) months after
the last winner has been selected, unless earlier terminated as
provided herein.
(b) Termination for Cause. Frankel or Provider may terminate this
Agreement upon a party's material breach of this Agreement,
provided that (a) a non-breaching party shall first have sent
written notice to the breaching party describing the breach in
reasonable detail and demanding that it be cured, (b) the
breaching party does not cure the breach within thirty (30) days
following its receipt of such notice, and (c) following the
expiration of the thirty (30) day cure period, the non-breaching
party sends a second written notice to the breaching party
indicating that the non-breaching party has terminated this
Agreement.
(i) Material Breach.
The following will be considered a material breach of this
Agreement:
(1) the failure of any party to perform or observe any
material term, condition, or covenant to be
performed by it under this Agreement;
(2) the execution of any assignment for the benefit of
creditors or the filing for relief by any party
under any applicable bankruptcy, reorganization,
moratorium, or similar debtor relief laws;
(3) the appointment of a receiver for Frankel or
Provider, or for substantially all of their
respective assets or properties; and
(4) An unauthorized assignment of this Agreement.
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(ii) Bankruptcy. If a proceeding is commenced under any
provision of the United States Bankruptcy code, voluntary
or involuntary, by or against either party, and this
Agreement has not been terminated, the non-debtor party
may file a request with the bankruptcy court to have the
court set a date within sixty (60) days after the
commencement of the case, by which date the debtor party
will assume or reject this Agreement and the debtor party
will cooperate and take whatever steps necessary to assume
or reject the Agreement by such date.
(c) Immediate Termination. Frankel may terminate this Agreement
without penalty upon ten (10) business days' written notice to
Provider, and if Provider has not cured the following breaches or
failures within such ten (10)-day period, in the following
instances: (I) immediately upon Provider's breach of Section
5(b); (II) immediately if in Frankel's reasonable opinion,
Provider has engaged in Unethical Conduct; and (III) on June 15,
2002, in the event Provider fails to provide acceptable music
content for publication on the Project website, as directed by
Frankel; provided, however, that Frankel acknowledges that
Provider has complied with this Section 8(c)(III). For the
purpose of this Section, "Unethical Conduct" means Provider
conduct or materials that are harmful, threatening, defamatory,
obscene, harassing, racially, objectionable, or promote violence,
discrimination, or illegal activities.
(d) Post Termination Cooperation. In the event this Agreement is
terminated prior to completion of the Services, Provider will
cooperate in the orderly transition to Frankel or another
contractor designated by Frankel to complete the Services.
9. Assignment. Neither party shall assign any part or all of this
Agreement, or subcontract or delegate any of it's rights or obligations
under this Agreement, without the other party's prior written consent.
Any attempt to assign, subcontract or delegate in violation of this
paragraph is void in each instance. All the terms and provisions of
this Agreement will be binding upon and inure to the benefit of and be
enforceable by the parties hereto and their respective successors and
permitted assigns.
10. Governing Law. This Agreement is governed by Washington law, excluding
its conflicts of law rules.
11. Jurisdiction and Venue. In the event of any dispute arising out of this
Agreement solely between Frankel and Provider, if Provider is the party
bringing a claim, Provider will file in the federal or state courts of
Cook County, Illinois, and if Frankel is the party bringing a claim,
Frankel will file in the federal or state courts of Los Angeles,
California, and each party waives all objections to jurisdiction and
venue of such courts. Provider irrevocably submits to venue and
exclusive personal jurisdiction in the federal and state courts in King
County, Washington for any dispute arising out of this Agreement between
AWS and Provider, and waives all objections to jurisdiction and venue of
such courts. Provider and Frankel irrevocably submit to venue and
exclusive personal jurisdiction in the federal and state courts in King
County, Washington for any dispute
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arising out of this Agreement between AWS, Frankel and Provider, and
each Frankel and Provider waives all objections to jurisdiction and
venue of such courts.
12. Local Work Rules. Provider shall make its best efforts to cause all of
its personnel to comply with all appropriate local work rules and
policies and appropriate laws while carrying out the Services.
13. Notices. Notices under this Agreement are sufficient if given by
nationally recognized overnight courier service, certified mail (return
receipt requested), facsimile with electronic confirmation, or personal
delivery to the other party at the address below: Notice is effective:
(i) when delivered personally, (ii) three business days after sent by
certified mail, (iii) on the business day after sent by a nationally
recognized courier service for next day delivery or (iv) on the business
day after sent by facsimile with electronic confirmation to the sender.
If to Frankel: Frankel & Company
111 E. Wacker Drive
Chicago, IL 60601
Fax: 312-552-5400
With a copy to: Barry L. Powell, General Counsel
Frankel & Company
111 E. Wacker Drive, Room 1902
Chicago, IL 60601
Fax: ____________
If to Provider: ARTISTdirect, Inc.
5670 Wilshire Boulevard
Suite 200
Los Angeles, California 90036
Fax: (323) 634-4299
A party may change its notice address by giving notice in accordance
with this paragraph. If this paragraph states no notice address for
Provider, notice will be effective if given to Provider at the address
specified in this Agreement's introductory paragraph or the last known
address.
14. Severability: If any provision of this Agreement is determined to be
unenforceable, the parties intend that this Agreement be enforced as if
the unenforceable provisions were not present and that any partially
valid and enforceable provisions be enforced to the extent that they are
enforceable.
15. No Waiver. A party does not waive any right under this Agreement by
failing to insist on compliance with any of the terms of this Agreement
or by failing to exercise any right hereunder. Any waivers granted
hereunder are effective only if recorded in a writing signed by the
party granting such waiver. The express waiver by a party hereto of any
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right or remedy in a particular instance will not constitute a waiver
thereof in any other instance.
16. Cumulative Rights. The rights and remedies of the parties under this
Agreement are cumulative, and either party may enforce any of its rights
or remedies under this Agreement or other rights and remedies available
to it at law or in equity.
17. Construction. The Section headings of this Agreement are for
convenience only and have no interpretive value. This Agreement may be
executed in counterparts, which together will constitute one and the
same agreement. Frankel and Provider cooperated in the preparation of
this Agreement and it will not be construed against or in favor of any
party by virtue of the identity, interest, or affiliation of its
preparer.
18. Injunctive Relief. Provider acknowledges that any material breach of
this Agreement by Provider would cause Frankel irreparable harm for
which Frankel has no adequate remedies at law. Accordingly, Frankel is
entitled to specific performance of this Agreement or injunctive relief
for any such breach.
19. Expertise. Frankel acknowledges that Provider has invested substantial
time, money, and effort in training Provider's employees to provide
services to Provider's clients. Frankel agrees not to hire any of
Provider's employees either during the term of this Agreement or within
one year subsequent to its termination, without Provider's prior written
approval.
20. Survival: All provisions of this Agreement that may reasonably be
interpreted or construed as surviving termination of the Agreement will
survive the termination of the Agreement.
21. Entire Agreement: This Agreement together with all Exhibits attached
hereto, which are incorporated by reference, constitute the complete and
final agreement of the parties pertaining to the Provider Services and
supersede the parties' prior agreements, understandings and discussions
relating to the Provider Services. No modification of this Agreement is
binding unless it is in writing and signed by Frankel and Provider. No
modification of Sections 4, 4(f), 6(a), 8, 10, 11, 12, 18, 23 or 24 is
binding unless Frankel obtains AWS's prior written consent and such
modification is in writing and signed by Frankel and Provider.
22. FORCE MAJEURE: Neither party shall be liable for its failure to perform
the covenants and obligations set forth herein by reason of fire,
strike, war, insurrection, government restrictions, act of God, or other
causes beyond its reasonable control. The affected party will promptly
notify the other parties in writing of the force majeure condition of
this magnitude, as soon as it is practicable to do so and shall use
every reasonable effort to resume its performance as quickly as possible
after the force majeure condition has passed or the facilities have been
restored.
23. Attorneys Fees/Cost/Remedies: If any dispute arises under this
Agreement, the substantially prevailing party will be entitled to
recover all its reasonable costs including without limitation, expenses
and attorney fees incurred through conclusion of the dispute.
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These provisions will not be construed to entitle any party other than
Provider or Frankel to recover their costs.
24. The parties agree that damages may be inadequate to compensate for the
unique losses to be suffered in the event of a breach hereof, and that
the damaged party will be entitled, in addition to any other remedy it
may have under this Agreement or at law, to seek and obtain injunctive
and other equitable relief, including specific performance of the terms
of this Agreement without the necessity of posting bond. All rights and
remedies will be cumulative and not exclusive of any other rights or
remedies.
25. MISCELLANEOUS:
(a) In the event that any term or provision of this Agreement shall
be held invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any
other term or provision hereof, and the parties agree thereafter
to use their best efforts to substitute a provision of similar
economic intent and effect.
(b) This Agreement may be executed in two or more counterparts, each
of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.
(c) Each party shall comply with the applicable laws, rules, and
regulations, including, but not limited to, the Children's Online
Privacy Protection Act, governing the performance of, or
obligations relating to, this Agreement.
The parties hereto have caused this Agreement to be executed as of the above
written date:
FRANKEL & COMPANY ARTISTdirect, INC.
By: /s/ TINA HOFFMAN By: /s/ MARC P. GEIGER
-------------------------------------- -------------------------------
Name: Tina Hoffman Name: Marc P. Geiger
-------------------------------- -------------------------
Title: Vice President/Account Director Title: Vice Chairman
------------------------------- ------------------------
12
<PAGE>
EXHIBIT A
SERVICES
PART I. TOUR SPONSORSHIP
1. TOUR SPONSORSHIP
AWS will be the Title Sponsor of a Tour comprised of ***** (*****)
concert events in AWS markets, to be mutually agreed upon by AWS, ARTISTdirect,
Inc. ("AD") and Frankel (the "Tour"). In appropriate markets, the title of the
Tour will be "AT&T Wireless presents ______," or another name as the parties may
mutually agree upon. Frankel is responsible for developing title treatment and
logo for the Tour, which is subject to AD's final approval. AT&T Wireless will
be the ***** Title Sponsor of the Tour and if there are additional Tour markets
beyond the ***** mentioned above, there will not be another Title Sponsor of
those markets. Further, as a point of reference, there will not be a presenting
sponsor of this Tour.
The Tour logo must be included on, but not limited to, the following
Tour-related items that use the Tour name or Mark: press releases, alternative
weekly print advertising, radio advertising, marquee signage (where available),
banner signage, broadcasts and webcasts produced for the Tour by Frankel/AWS,
and Provider-controlled online media. In addition, the Tour logo will be
included on the following Tour-related items that use the Tour name or Mark:
calendar listings in print, tickets (subject to space availability), third party
controlled online media or websites, collateral materials, promotional
materials; provided, however, that failure to include the Tour logo in such
items will not be a material breach of this Agreement.
2. TOUR SPONSORSHIP RIGHTS
AD to provide the following benefits:
(a) Title sponsorship of a Tour based on AWS specified markets that
will occur between *****, and which is scheduled to include a
minimum of ***** geographic markets which parties will match to
markets designated by Frankel and have high college populations.
No less than ***** (*****) Tour artists will perform at each
show, in venues with a ***** person capacities. Tour artists will
be mutually agreed upon closer to the actual Tour dates and will
be based upon such artist's demonstrated connection with a
college demographic. Potential artists may include: *****.
(b) At **** of these geographic markets.
-----------------
* In accordance with Rule 24b-2 under the Securities and Exchange Act of 1934,
this confidential information has been omitted from this exhibit pursuant to a
request for confidential treatment, and has been filed separately with the
Securities and Exchange Commission.
13
<PAGE>
(i) AWS/Frankel to provide either two (2) 4x12 or three (3)
4x8 foot AWS banners or signage to be displayed at
mutually agreed-upon areas, subject to venue and artist
restrictions. AD will store and transport such banners or
signage during the Tour, but will not be responsible for
any damage to such banner or signage during transportation
or by attendees at the Tour concerts.
(ii) AWS/Frankel to provide a minimum of ten (10) 3x6 foot
smaller banners to be displayed inside and outside the
venue, subject to venue and artist restrictions. AD will
store and transport such banners or signage during the
Tour, but will not be responsible for any damage to such
banner or signage during transportation or by attendees at
the Tour concerts.
(iii) Where available, AD to provide AWS with Marquee signage
display
(iv) AD will provide audio announcements that will be made at
each Tour performance recognizing AWS' sponsorship
(v) If available, a video monitor may be utilized to display
promotional spots before each performance
(vi) In ***** markets as selected by Frankel and AWS, tickets
for *****% of the each venue's seating capacity will be
provided to Frankel/AWS and if available, Provider will
provide Frankel/AWS with access to a VIP area for
promotional and hospitality purposes. In the remaining
***** markets, Frankel/AWS will receive tickets for the
equivalent of *****% of the venue's seating capacity and
VIP area access, if available. Should additional tickets
be required by Frankel/AWS, they will be available for
purchase at face value and any surcharges applied by third
parties by Frankel and/or AWS - see (d)
(vii) At designated events to be mutually determined by Frankel
and AD (at a minimum in markets were AWS customers have
been rewarded with tickets (vi) and an opportunity to meet
the artist), AD will coordinate an artist "Meet and
Greet".
(viii) Where available, AD will provide access to a VIP Area at
each venue, subject to venue and/or space restrictions and
AD will use its best efforts to provide AWS with signage
in such VIP areas.
(ix) AD will provide one representative in each market to
fulfill the on-site requirements as provided by this
Agreement, including but not limited to storing,
transporting and otherwise maintaining AWS signage.
-----------------
* In accordance with Rule 24b-2 under the Securities and Exchange Act of 1934,
this confidential information has been omitted from this exhibit pursuant to a
request for confidential treatment, and has been filed separately with the
Securities and Exchange Commission.
14
<PAGE>
(x) One (1) 10 x 10 foot display booth or kiosk to promote,
display and solicit new customers for its products and
services, subject to Venue and/or space restrictions.
Booth to be provided by Frankel/AWS at their cost and
expense. AD will store and transport such display during
the Tour but will not be responsible for any damage to
such display during transportation or by attendees at the
Tour concerts.
(xi) Unless as may otherwise be agreed upon by AD and Frankel,
a maximum of ***** (*****) `working passes' to allow
Frankel/AWS employees entry to the Venue. Such passes
will allow AWS/Frankel employees access only to such
non-public areas as are necessary to effectuate the
provisions of this Agreement, but in no event shall such
employees be permitted in those areas designated for
musical artists unless the Meet and Greets are in such
designated areas. In the event that AWS or Frankel
employees violate this provision, AD will have the right
to reclaim the "working passes" immediately for the
duration of the Tour.
(xii) AD will extend the opportunity to Frankel/AWS to develop
additional promotional programs around Title Sponsorship
of the Tour. These opportunities will be mutually agreed
to by AD and Frankel/AWS.
(xiii) AD will provide Frankel with full pass through rights for
use with AWS equipment vendors and retail partners, which
rights may include participation in the promotional
opportunities provided to Frankel/AWS under this
Agreement; provided, however, that any such direct
participation must be approved by AD. Approval may not be
unreasonably held, and Vendor to be included in all
promotional exposure as requested by Frankel. Frankel/AWS
will receive the right to use artists' marks and logos
solely in promotional materials, campaigns, advertising,
and specialized merchandise-designed for the purpose of
promoting or performing the obligations contemplated by
this Agreement, and subject in each instance to AD's prior
written approval. Frankel/AWS will be entitled to promote
the Tour through in-store banners, posters, counter-cards,
and other methods, with Frankel//AWS bearing the full and
complete costs associated with these activities and
materials subject to AD approval, such approval not to be
unreasonably withheld.
(c) In any remaining markets in which there are Tour performances, AD
will use reasonable efforts to insure that AWS banners or signage
are displayed through the performances.
-----------------
* In accordance with Rule 24b-2 under the Securities and Exchange Act of 1934,
this confidential information has been omitted from this exhibit pursuant to a
request for confidential treatment, and has been filed separately with the
Securities and Exchange Commission.
15
<PAGE>
(d) In each Tour market, AD will ensure that *****% of venue
capacity, and no less than ***** tickets, (the "Initial
Allotment") will be held in advance of the on-sale date. This
"Ticket Hold Period" will begin at the Advance Ticket Pre-Sale
period, as designated by AD and agreed by Frankel and AD and will
continue until ***** (*****) business days before the actual show
date. On the ***** (*****) business day prior to show date (the
"Cut-off Date"), any remaining tickets from the original *****%
will be returned for public sale. In the event that Frankel/AWS
use the entirety of the Initial Allotment in a particular market,
AWS will notify AD immediately, and additional tickets will be
placed on hold at a rolling rate of *****% of available capacity
at that time during the Ticket Pre-Sale Period. Frankel/AWS will
make purchase from said allotment at ***** plus any applicable
***** applied by third parties, and must confirm said purchases
before remaining tickets are returned for public sale in order to
ensure ticket availability before the Cut-off Date. In the
alternative, Frankel/AWS may provide AD with a credit card number
for such purchases.
(3) ADDITIONAL PROMOTIONAL RIGHTS
To the extent that AD is granted appropriate licenses from the Tour's
artists for name and likeness rights for the purpose of promoting Tours,
such rights will be extended to Frankel only to promote each Tour event,
and only with respect to AWS' Title Sponsorship of the Tour, and will be
subject to AD's final approval. AD will make best efforts to obtain
licenses from the Tour's artists for promotional elements including, but
not limited to, ring tones, artwork for current CD releases, questions
and answers to support content areas as identified below, artist's
imagery and photography and illustrations. Based on the provisions set
forth in this Exhibit A, Frankel will provide AD with a list of
promotional items to be negotiated as part of the contract with a band.
(4) RESULTS AND RECAP
AD will provide post-Tour, Program and Content re-cap in writing of AWS'
sponsorship to Frankel no later than 8 weeks after the conclusion of the
tour (date to be determined) that will include, but is not limited to,
event attendance figures for the Tour, event advertising impressions,
click through rates for AWS online advertising on the AD network, click
through information on select content links which may include videos,
downloads, playlists, and advance tickets, photocopies of online
advertisements placed by AD on its own network sites or other locations
if any, and a summary of total Sponsor advertising if available to AD,
including actual online impressions (research source must be noted),
tear sheet examples from certain AD-placed and Tour-placed print
advertising, and AD will use its best efforts to provide notarized
affidavits of performance for certain radio advertising including two
sample tapes of Tour advertising.
-----------------
* In accordance with Rule 24b-2 under the Securities and Exchange Act of 1934,
this confidential information has been omitted from this exhibit pursuant to a
request for confidential treatment, and has been filed separately with the
Securities and Exchange Commission.
16
<PAGE>
PART II. MICROSITE CONTENT
AD will provide access to and/or maintain content on Frankel/AWS' behalf
for the twelve month term beginning June 13, 2002 and ending June 12, 2003 in
accordance with the Terms of this agreement. Content provided by AD must be
accompanied by a reference to the phrase "Powered by ARTISTdirect" as mutually
determined by AD and Frankel. . Frankel will work with AD to fulfill AD's
obligations to its content providers regarding co-branding. In addition, content
provided by AD must be used only in association with the "Program" and must be
served and hosted on the server provided to AWS/Frankel by AD. AWS/Frankel will
be responsible for posting, maintaining, and managing the content provided by
AD, and will not be posted live by AWS/Frankel or any third party until the
parties have executed this Agreement.
AD will provide access to and/or maintain the following content:
1. ON-GOING CONTENT
o Featured Artist Downloads -- Music downloads accessible to users.
Each download may be posted live for a *****-day period only and
must include a link to the featured artist's website, which link
will be provided by AD.
o Music Genre Playlist - preview of the latest new music from the
top five genres. Each genre listing will be updated on a monthly
basis and will include up to ***** different songs.
o Music News - up-to-date music news and information featuring
current artists, tours, and concert listings.
o Music Videos - an online "Video Jukebox" featuring music videos.
Each video may be posted live for a *****-day period only and
include a link to the featured artist's website, which link will
be provided by AD.
o Advanced Ticket Window - access to an online advance ticket
purchase window to enable users to purchase concert tour tickets
in advance of the general public. Access to tickets for the Tour
will be exclusively available in advance, on mutually agreed upon
dates, through the Microsite. AD will use its best efforts to
make a minimum of ***** concert opportunities available through
the Advance Ticket Window over the Term.
2. CONTENT ASSOCIATED WITH TOUR SPONSORSHIP
o Concert Tour Dates - a complete calendar of events with venue locations
associated with the Tour.
-----------------
* In accordance with Rule 24b-2 under the Securities and Exchange Act of 1934,
this confidential information has been omitted from this exhibit pursuant to a
request for confidential treatment, and has been filed separately with the
Securities and Exchange Commission.
17
<PAGE>
o Concert Tour Reviews - ARTISTdirect will facilitate and collect
fan reviews of the Tour concert events.
o Road Report - a journal from the road as the Tour makes its way
across the country. Candid reports about the artist, fans, and
crew will be included with digital photos as well.
o Featured Artist Ring Tones - AD will make best efforts to obtain
permission for Frankel/AWS to create ring tones from the Tour's
artists that may be used by Frankel/AWS as part of the program.
o Featured Artist Photo Gallery - a selection of exclusive photos
from the Tour artists sharing life backstage, the fans, and the
artists in action.
o Artist "Top 5" List - a list of the latest music that the Tour
artists are listening to, including links to purchase such music
on www.artistdirect.com.
3. CONTENT ASSOCIATED WITH ULTIMATE EXPERIENCE PROMOTION
o Band Interviews - an exclusive opportunity for "Ultimate
Experience" contest winners to ask questions directly to featured
bands. Program users may submit questions potentially to have a
winner ask such question of the artist in person; provided,
however, that AWS must provide AD's Tour representative, or the
contest winner with a list of questions from the Microsite. A
complete transcript will be available for AWS's use on the
Microsite.
PART III. MEDIA
AD will provide Frankel/AWS with the following media benefits:
1. TOUR SPONSORSHIP MEDIA
AD will provide the following media in support of the Tour Sponsorship
illustrated in Exhibit A.
o AWS will be represented in the following media (but not limited to):
press releases, alternative weekly print advertising, radio
advertising, marquee signage (where available), banner signage,
broadcasts and webcasts produced for the Tour by Frankel/AWS, and
Provider-controlled online media. In addition, the Tour logo will be
included on the following Tour-related items that use the Tour name or
Mark: calendar listings in print, tickets (subject to space
availability), third party controlled online media or websites,
collateral materials, promotional materials; provided, however, that
failure to include the Tour logo in such items will not be a material
breach of this Agreement. AWS' logo will be included at a minimum of
one third the size of Artist's logo and/or name.
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<PAGE>
o Further, AD will use its best efforts to include the AWS Points Program
ticket offer in any isolated area of print advertising and the size and
positioning of said offer will be mutually agreed by Frankel and AD. AD
will make best efforts to include the URL, attwireless.com/ultimate,
tagged at the end such radio spots.
o More specifically, the following specific media will be delivered to
Frankel/AWS:
APPROX. IMPRESSION
MEDIA VEHICLE/COMPONENT REACH IMPRESSIONS CPM VALUE
----------------------- ------- ----------- ---------- -------
Local Promoter Print Advertising ***** ***** $***** $*****
Local Promoter Radio Advertising ***** ***** $***** $*****
Banner Signage ***** ***** $***** $*****
Audio Announcement ***** ***** $***** $*****
----- ----- ------ ------
Sub-Totals: ***** ***** $***** $*****
===== ===== ====== ======
2. ADDITIONAL MEDIA SUPPORT
AD will provide media in support of Frankel/AWS' overall Ultimate Experience
program. The media vehicles/components of said media plan will be adjusted and
finalized over the Term of the Agreement by the parties, but AD will deliver a
minimum value as identified below:
APPROX. IMPRESSION
AD MEDIA VEHICLE/COMPONENT REACH IMPRESSIONS CPM VALUE
-------------------------- ------- ----------- ---------- -------
ARTISTdirect Network Newsletter ***** ***** $***** $*****
ARTISTdirect Third Party E-Mail ***** ***** $***** $*****
ARTISTdirect Homepage Flash ***** ***** $***** $*****
Premium Placement Custom Ad Units ***** ***** $***** $*****
Ticket Page ***** ***** $***** $*****
.edu Targeting ***** ***** $***** $*****
Run of Network ***** ***** $***** $*****
Run of Network ***** ***** $***** $*****
----- ----- ------ ------
Sub-Totals: ***** ***** $***** $*****
===== ===== ====== ======
IMPRESSION
THIRD PARTY MEDIA REACH IMPRESSIONS CPM VALUE
----------------- ------- ----------- ---------- -------
Ticketmaster ***** ***** $ ***** $ *****
----- ----- ------- -------
Sub-Totals: ***** ***** $ ***** $ *****
===== ===== ======= =======
MEDIA TOTALS ***** ***** $ ***** $ *****
===== ===== ======= =======
-----------------
* In accordance with Rule 24b-2 under the Securities and Exchange Act of 1934,
this confidential information has been omitted from this exhibit pursuant to a
request for confidential treatment, and has been filed separately with the
Securities and Exchange Commission.
19
<PAGE>
PART IV. ULTIMATE EXPERIENCES
AD will develop and deliver up to ***** (*****) "Ultimate Experience"
prize packages in conjunction with the overall Ultimate Experience program, and
Frankel will confirm such packages no later than July 31, 2002. ARTISTdirect
will make arrangements, on behalf of AWS, for up to five Ultimate Experience
prize packages in the areas of music, fashion, and/or entertainment (movies
and/or television). Details of each Ultimate Experience package will be outlined
in a formal addendum to this contract once the packages have been finalized.
The Ultimate Experience prize packages will be fulfilled within *****
(*****) months of AWS's finalization of all documentation associated with
confirming each contest prize winner. The exact dates of contests remain TBD.
Each Ultimate Experience promotion will have a value of $*****, comprised of (i)
***** Grand Prize with a promotional value of $*****, and (ii) a minimum of
***** (*****) first prizes with promotional values of $***** each.
-----------------
* In accordance with Rule 24b-2 under the Securities and Exchange Act of 1934,
this confidential information has been omitted from this exhibit pursuant to a
request for confidential treatment, and has been filed separately with the
Securities and Exchange Commission.
20
<PAGE>
EXHIBIT B
COMPENSATION
FEE PAYMENT SCHEDULE
1. Frankel will pay the following fees in conjunction with the program as
outlined in Exhibits A,B and C:
PROGRAM AWS COSTS
------- ---------
Tour Sponsorship $ *****
Microsite content $ *****
Media *****
3rd Party Media *****
---------
TOTAL $ *****
=========
The $***** payment due will be made in the following four installments:
(i) $*****
(ii) $*****
(iii) $*****
(iv) $*****
(v) $*****
2. Separately, the following payment structure will be in place in conjunction
with the provision of Ultimate Experiences as described in Exhibit E which will
be provided at a future date as mutually agreed by AD and Frankel.
Each Ultimate Experience and applicable prizes will have a value of $*****, and
Frankel agrees to pay ARTISTdirect for those prizes that are formalized by an
addendum to this agreement. Payments will be as follows:
(i) $***** due upon signing of the addendum
(ii) $***** due upon launching of each Ultimate Experience Sweepstakes
(iii) $***** due once contest winner has redeemed his/her Ultimate
Experience Grand Prize
-----------------
* In accordance with Rule 24b-2 under the Securities and Exchange Act of 1934,
this confidential information has been omitted from this exhibit pursuant to a
request for confidential treatment, and has been filed separately with the
Securities and Exchange Commission.
21
<PAGE>
EXHIBIT C
INSURANCE REQUIREMENTS
(a) COMMERCIAL GENERAL LIABILITY INSURANCE -- Including Independent
Contractors, Contractual Liability, Personal and Advertising Injury, Broad Form
Property Damage, Products/Completed Operations, and associated defense costs.
The parties shall maintain limits of at least $***** per occurrence.
(b) WORKER'S COMPENSATION INSURANCE as prescribed by the law of the
state in which the work is performed and Disability Benefits Liability in
applicable states (e.g., N.Y., N.J., R.I.)
(c) EMPLOYER'S LIABILITY INSURANCE with annual limits of at least *****
dollars ($*****) for each accident, for each employee by disease, and Policy
limit by disease.
(d) All coverages must be primary and non-contributory, must be written
on an occurrence basis (unless otherwise stated) and must be maintained without
interruption from the date of this Agreement until the date of termination of
this Agreement. The insurance policies providing such coverage shall
specifically refer to, and provide insurance coverage for, all of the parties'
indemnity obligations under this Agreement.
(e) The insurance policies and coverages required by this Agreement must
not expire for at least one (1) year from the date of issuance and must contain
a provision that coverages afforded under the policies will not be canceled or
allowed to expire unless the other party has received at least thirty (30) days
prior written notice. Insured party is responsible for all deductible payments.
-----------------
* In accordance with Rule 24b-2 under the Securities and Exchange Act of 1934,
this confidential information has been omitted from this exhibit pursuant to a
request for confidential treatment, and has been filed separately with the
Securities and Exchange Commission.
22