Internet Video License Agreement - Maverick Recording Co. and ARTISTdirect Inc.
12.15.99
INTERNET VIDEO LICENSE AGREEMENT
THIS AGREEMENT is made as of the 20th day of December, 1999 BETWEEN:
1. MAVERICK RECORDING COMPANY ("Maverick") of 9348 Civic Center Drive,
Beverly Hills, California 90210; and
2. ARTISTdirect, INC. ("ADI") of 17835 Ventura Boulevard, Suite 310,
Encino, California 91316.
BACKGROUND
A. WHEREAS, Maverick, in order to promote the sale and distribution of
phonorecords and audio-visual music products throughout the "Territory"
(as hereinafter defined in subparagraph 1.01(o)), licenses the use of
"Maverick Videos" (as hereinafter defined in subparagraph 1.01(q)); and
B. WHEREAS, ADI intends to "Stream" (as hereinafter defined in
subparagraph 1.01(l)) Maverick Videos from "Licensed Music Sites" (as
hereinafter defined in subparagraph 1.01(e)).
C. NOW THEREFORE, the parties hereto have agreed to the terms and
conditions set forth below with respect to the non-exclusive use by ADI
of Maverick Videos on Licensed Music Sites.
THE PARTIES AGREE AS FOLLOWS:
1. DEFINITIONS AND INTERPRETATION
1.01 Definitions Unless defined elsewhere in this Agreement, capitalized
terms shall have the meanings ascribed to them below:
(a) "ENDUSER DEVICE": any device (such as a computer or a Web TV) which is
capable of receiving and playing/displaying the audio-visual output of
a Streamed Video.
(b) "EXCERPT": means a continuous audio-visual portion of a Maverick Video
where no more than 30 seconds thereof may be accessed by the enduser or
viewed by a viewer.
(c) Intentionally deleted.
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(d) "INTERNET": the wide area cooperative network of university, corporate,
government and private computer networks communicating through
Transmission Control Protocol/Internet Protocol which is commonly
referred to as the Internet.
(e) "LICENSED MUSIC SITE": any Music Site which: (i) (A) is either wholly-
or partially-owned by ADI; and (B) is wholly-programmed and operated by
ADI; and (C) is prominently and exclusively branded with the tradename,
trademark or logo of ADI; or (ii) (A) is operated and managed by ADI
and (B) is subject to a comprehensive written web site agreement
between ADI and a recording artist (or such recording artist's
furnishing company) ("Artist") of the type which ADI typically enters
into with recording artists as of the date hereof; provided, that such
Artist is a recording artist then-currently signed to an exclusive
recording agreement with Maverick, which such Music Site on a gratis
basis (A) Streams Videos in a sequence designated by ADI on a
continuous 24-hour, seven-day-a-week basis (i.e., as part of a
"Pre-Programmed Stream") or (B) Streams particular Videos at the demand
of an enduser (i.e., as part of an "On-Demand Stream"). Without
limiting the foregoing, "Licensed Music Site" shall include all of
those "pages" on a Music Site: (w) that constitute "home pages"; (x)
that direct an enduser to a Video; (y) through which an enduser
navigates in order to view a Video; or (z) from which an enduser can
Stream a Video.
(f) "MASTER": a first generation color copy of the fully-edited titled and
assembled electronic master of a Maverick Video (a "Videotape Copy")
or, at Maverick's election, a copy of such electronic master digitized
by Maverick in a format compatible with ADI's technical requirements (a
"Digitized Copy").
(g) "MUSIC SITE": a non-subscription, music audio-visual programming
service which may be advertiser-supported, which: (i) is delivered over
the Internet (which may also include delivery via broadband
technology); (ii) is transmitted from fileservers exclusively located
in the United States using Streaming technologies; (iii) uses English
as the principal language spoken by hosts or used in textual, graphic
or interstitial programming; and (iv) if such service transmitted
digital audio data only, rather than digital audio-visual data (other
than with respect to On-Demand Streams) would be subject to statutory
licensing pursuant to Paragraph 2, Subsection d, Section 114 of title
17, United States Code (the "Digital Millennium Copyright Act").
(h) "ON-DEMAND STREAM FRACTION": a fraction, the numerator of which is that
number of transmissions to an individual enduser of Maverick Videos (in
whole or in part) other than Excerpts on a particular Licensed Music
Site as part of an On-Demand Stream and the denominator of which is
that number of transmissions to an individual enduser of Videos (in
whole or in part),
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including Maverick Videos, on such particular Licensed Music Site as
part of an On-Demand Stream, as determined in a calendar quarter.
(i) "ON-DEMAND STREAM RECEIPTS": [***]*.
(j) "PRE-PROGRAMMED STREAM FRACTION": a fraction, the numerator of which is
that number of transmissions to an individual enduser of Maverick
Videos (in whole or in part) other than Excerpts on a particular
Licensed Music Site as part of a Pre-Programmed Stream and the
denominator of which is that number of transmissions to an individual
enduser of Videos (in whole or in part), including Maverick Videos, on
such particular Licensed Music Site as part of a Pre-Programmed Stream,
as determined in a calendar quarter.
(k) "PRE-PROGRAMMED STREAM RECEIPTS": [***]*.
(l) "STREAM(s)(ed)(ing)": a public performance of any duration via the
Internet that permits an enduser to view data contemporaneously with
its reception by an Enduser Device in such a manner that the data is
not copied, duplicated or stored in such Enduser Device except by way
of temporary buffering.
(m) "TERM": shall commence on the date of this Agreement and end on
December 31, 2001, unless sooner terminated as set forth herein.
(n) "TERM YEAR": each separate, consecutive 12-month period of the Term.
(o) "TERRITORY": worldwide.
(p) "VIDEO": an audio-visual work embodying the sound recording of a single
musical composition in synchronization with visual images intended
primarily for promotional use.
(q) "MAVERICK VIDEO": any Video with respect to which Maverick has
promotional exhibition rights in the Territory (a "Controlled Video")
that Maverick wishes to license to unaffiliated third parties for
broadcast television exhibition or to unaffiliated third party Music
Sites for Streaming, provided that the soundtrack of such Video is a
duplicate of a sound recording owned or controlled for the Territory by
Maverick. "Maverick Videos" shall not include: (i) any Videos
commercially exhibited prior to the commencement of the Term; or (ii)
any Video which is part of a long-form audio-visual program and is not
distributed or licensed by Maverick separately therefrom. [***]*.
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* Confidential treatment has been requested for the bracketed portion. The
confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
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1.02 Headings The headings used in this Agreement are for ease of
reference only and shall have no effect on the interpretation or
construction of this Agreement.
1.03 Plural/Singular/References The plural may include the singular and the
singular may include the plural and this Agreement shall be interpreted
in this regard as the context may require. References to paragraphs and
subparagraphs are to paragraphs and subparagraphs of this Agreement,
and references to any agreement or other instrument shall be deemed to
include references to that agreement or other instrument as varied or
replaced from time to time.
2. GRANT OF RIGHTS
2.01 Duplication Rights During the Term, subject to the terms and conditions
of this Agreement, Maverick grants to ADI a non-exclusive license to
digitally encode and duplicate Maverick Videos in their entirety for
duplication on ADI's fileservers for the sole purpose of producing
programming containing Maverick Videos for Streaming on Licensed Music
Sites.
2.02 Streaming Right Subject to the terms and conditions of this Agreement
and any contractual restrictions imposed upon Maverick in connection
with Maverick Videos of which Maverick has advised ADI in writing with
reasonable advance notice, during the Term Maverick grants to ADI a
non-exclusive license: (a) to permit endusers to access via Streaming
Maverick Videos in their entirety as part of a Pre-Programmed Stream on
a Licensed Music Site; and (b) to permit endusers to access via
Streaming Maverick Videos in their entirety as part of an On-Demand
Stream on a Licensed Music Site; provided, however, that endusers shall
not be able to Stream more than one Maverick Video at a time as part of
a continuous transmission (i.e., endusers shall not be able to Stream a
series of Maverick Videos as part of one continuous transmission).
Continuously during the Streaming of any Maverick Video as part of an
On-Demand Stream and in a space that is "above the fold," near or
adjacent to, and on the same page as such Maverick Video, ADI shall, at
ADI's sole cost and expense, provide a button permitting an enduser
"one-click" access to the "home page" for Maverick's official site of
the applicable artist (or, if the artist does not have an official
site, Maverick's site), provided that Maverick delivers to ADI, prior
to or no later than Maverick's delivery of the applicable Maverick
Video, the foregoing "home page" information. If other links are
provided to third-party sites for the same artist, then Maverick's link
shall be the first listed and the most prominent.
2.03 Advertising and Promotion Subject to the terms and conditions of this
Agreement and any contractual restrictions imposed upon Maverick in
connection with Maverick Videos of which Maverick has advised ADI in
writing, during the Term, ADI may utilize Excerpts in any and all media
to
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advertise, promote and publicize the exhibition of Maverick Videos on
the Licensed Music Sites; provided, however, that, without Maverick's
written consent, no more than one Excerpt per artist may be used for
such purpose.
2.04 Names and Likenesses Subject to the terms and conditions of this
Agreement and any contractual restrictions imposed upon Maverick in
connection with Maverick Videos of which Maverick has advised ADI in
writing with reasonable advance notice, during the Term, ADI may use
the name and Maverick-approved or -supplied likenesses, such approval
not to be unreasonably withheld or delayed, of such artist for the
purposes of advertising, promoting or publicizing the Streaming by ADI
of such Maverick Video on the applicable Licensed Music Site, but not
in a manner which implies an endorsement of any service (including,
without limitation, Licensed Music Sites) or product without Maverick's
prior consent.
2.05 Reservation of Rights
(a) As between Maverick and ADI, Maverick retains all ownership rights in
Masters and Maverick Videos including, without limitation, all
copyrights and trademarks in Masters and Maverick Videos; provided,
however, that Maverick shall not use in any manner any Digitized Copy
of a Maverick Video created by or at the direction of ADI, unless
Maverick has made payment therefor in accordance with paragraph 4.01.
(b) ADI shall not have any rights in Maverick Videos other than as
expressly provided in this Agreement.
2.06 Withdrawal Rights
ADI agrees that ADI's rights to Stream any Maverick Video may be
terminated by Maverick upon one week's prior written notice to ADI if
any of the following conditions are met:
(a) If Maverick, in Maverick's good faith business judgment believes that
such termination is necessary for significant artist relations
purposes; or
(b) If Maverick's rights in the Maverick Video terminate; or
(c) If Maverick is notified or otherwise becomes aware of an apparently
bona fide third-party claim that the transmission of the Maverick Video
infringes rights owned by others.
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3. PROHIBITIONS ON ADI
ADI shall only have the right to exploit or use Maverick Videos as
specifically authorized in Paragraph 2 of this Agreement, or as
otherwise agreed to by Maverick in writing in its sole discretion, and
may not exploit or use Maverick Videos in any other manner. Without
limiting the foregoing, unless Maverick agrees otherwise in writing,
during the Term, neither ADI nor any party acting on behalf of ADI
shall, directly or indirectly:
(a) copy or duplicate any Maverick Video except as ADI may reasonably
require to exercise ADI's rights under this Agreement;
(b) Stream (or encode to permit the Streaming of) the audio portion of any
Maverick Video at a transmission rate greater than [***]* or the video
portion of any Maverick Video at a transmission rate greater than
[***]*;
(c) Stream the soundtrack of any Maverick Video separately from the visual
portion thereof;
(d) Stream the visual portion of any Maverick Video separately from the
soundtrack thereof, except to the extent that ADI uses only the visual
portion of an Excerpt to exercise ADI's rights under subparagraph 2.03
above without any soundtrack whatsoever;
(e) Stream any Maverick Video other than in conjunction with the sequence
of images originally synchronized with the sound recording included
thereon;
(f) Stream any Maverick Video on a "pay-per-view" or "pay-per-play" basis;
(g) exhibit any advertisement or commercial of any nature during or
associated with the Streaming of any Maverick Video in a manner which
reasonably implies an endorsement by the artist whose performances are
contained on such Maverick Video;
(h) license or authorize a third party (whether or not affiliated with ADI)
to "deep link" to a non-Licensed Music Site for the purpose of
Streaming a Maverick Video; or
(i) except as expressly set forth in Paragraph 5, edit or otherwise alter
any Maverick Video, including, without limitation, the deletion or
erasing of any signal now or hereafter contained therein to facilitate
the automatic identification and/or logging of Maverick Videos so
Streamed and/or to restrict
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* Confidential treatment has been requested for the bracketed portion. The
confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
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the reproduction of Maverick Videos so Streamed (a "Protective
Signal").Should ADI become aware that any party (whether or not acting
on behalf of ADI) is circumventing the provisions of this Paragraph 3
(a "Circumvention Event"), ADI shall promptly notify Maverick in
writing thereof and ADI shall, at ADI's sole cost and expense, use
ADI's commercially reasonable efforts to prevent such circumvention.
4. MAVERICK VIDEOS
4.01 Servicing of Masters In respect of each Maverick Video, Maverick shall
make a Master available to ADI for collection at ADI's expense, no
later than the date Maverick makes the applicable Maverick Video
available for delivery to other unaffiliated third parties. Should
Maverick provide ADI with a Master in Videotape Copy form, ADI shall
provide Maverick, at Maverick's request, with a Digitized Copy of such
Master provided that Maverick pays ADI's actual duplication and
shipping expenses in connection therewith.
4.02 Treatment of Maverick Videos and Masters
ADI shall:
(a) maintain all Masters and all copies of Masters on ADI's premises and
safeguard the same from any loss, damage, theft, unauthorized use,
copying, storage or duplication by others;
(b) be solely responsible for any loss, theft or damage to Masters and
copies of Masters in their possession and any unauthorized use,
copying, storage or duplication by others thereof; and
(c) upon the expiration of the Term or termination of this Agreement, at
Maverick's election, ADI shall either: (i) (A) to the extent that
Maverick made Digitized Copies of any Masters and provided them to ADI
hereunder, return all such Masters and copies of such Masters to
Maverick at ADI's expense; (B) to the extent that ADI made Digitized
Copies of any Masters hereunder, but has not provided Digitized Copies
of such Masters to Maverick pursuant to subparagraph 4.01 above, return
all such Masters and copies of such Masters to Maverick and Maverick
shall pay ADI's actual duplication and shipping expenses; and (C) to
the extent that ADI made Digitized Copies of any Masters hereunder and
has provided Digitized Copies of such Masters to Maverick pursuant to
subparagraph 4.01 above, return all such Masters and copies of such
Masters to Maverick at ADI's expense; or (ii) or destroy all Masters
and all copies of Masters at ADI's sole cost and expense, and provide
Maverick with a written affidavit verifying such destruction.
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5. ADI'S UNDERTAKINGS
During the Term, ADI shall have the obligation, at ADI's sole cost and
expense:
(a) to exhibit the following information continuously during the Streaming
of each Maverick Video in a space adjacent to the Maverick Video,
provided that Maverick submits such information to ADI in a timely
manner:
(i) the title of the musical composition on the Maverick Video;
(ii) the title of the record or home video that includes the
performance of the musical composition contained in the Maverick
Video;
(iii) the name of the artist performing the musical composition
contained in the Maverick Video;
(iv) the name of the record company and the URL of its "home page";
and
(v) the name of the motion picture, if any, from which the Maverick
Video is derived.
(b) to obtain public performance rights licenses, if necessary, covering
the performance of the musical compositions in Maverick Videos; and
(c) to transmit as part of each Maverick Video Streamed on Licensed Music
Sites any Protective Signal contained in the Maverick Videos; provided,
however, that the transmission of such Protective Signal does not
represent a recurrent and unreasonable cost to ADI and in no way leads
to the deterioration of Streaming quality of Maverick Videos.
6. MAVERICK'S UNDERTAKINGS
Maverick shall deliver to ADI, at Maverick's expense (where available
and reasonably contemporaneously with the delivery of the relevant
Masters) artwork, promotional material, biographical material and other
information in relation to Maverick Videos and the relevant artists, to
be used by ADI solely for promotional purposes on Licensed Music Sites.
7. COMPENSATION
7.01 Royalties ADI shall pay to Maverick royalties equal to: [***]*.
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* Confidential treatment has been requested for the bracketed portion. The
confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
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7.02 Banner Ads
ADI shall make "Banner Ads" (the "Banner Ads") available to Maverick at
[***]*.
8. ACCOUNTING AND PAYMENTS; MARKET RESEARCH
8.01 Accounting Within 30 days following each calendar quarter of the Term,
ADI shall account for and pay to Maverick any royalties payable in
respect of such quarter and shall furnish to Maverick a statement
setting forth:
(a) a listing of all Maverick Videos Streamed on each Licensed Music Site
during such quarter;
(b) the number of Maverick Videos Streamed on each Licensed Music Site as
compared to the total number of Videos Streamed on each such Licensed
Music Site during such quarter;
(c) Pre-Programmed Stream Receipts and On-Demand Stream Receipts for such
quarter and the sources thereof;
(d) the number of times that Maverick Videos were Streamed on each Licensed
Music Site as compared to the total number of times that Videos were
Streamed on each such Licensed Music Site during such quarter;
(e) the number of "pageviews" of the Banner Ads during such quarter and the
number of "clickthroughs" from the Banner Ads to URLs designated by
Maverick during such quarter. ADI shall also furnish Maverick with the
information described in subparagraphs 8.01(a), (b) and (d) on a weekly
basis within 10 days following the end of each week during the Term.
8.02 Audit Rights
(a) ADI shall keep complete and accurate books and records of account
relating to the Streaming of Maverick Videos and Videos maintained to a
standard sufficient to enable an audit trail to be established.
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* Confidential treatment has been requested for the bracketed portion. The
confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
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(b) Maverick shall have the right during the Term and during the two-year
period following the termination or expiration of the Term, at
Maverick's sole cost and expense, to have a certified public accountant
inspect ADI's books and records no more than once during any year. This
inspection shall take place at ADI's office, during normal business
hours on not less than 30 days' written notice. The auditor appointed
by Maverick may inspect and take copies of the books and records of ADI
solely for the purpose of verifying the calculation of royalties
accruing to Maverick under this Agreement and verifying ADI's
compliance with Paragraph 7.
(c) Each statement rendered under this Agreement shall be deemed final and
binding upon Maverick as an account stated and shall not be subject to
any claim or objection by Maverick unless Maverick notifies ADI of
Maverick's objection to the applicable statement, stating the basis
thereof in reasonable detail within three (3) years after the date such
statement was rendered to Maverick hereunder.
8.03 Market Research
ADI and Maverick shall cooperate with each other in conducting market
research, at Maverick's sole cost and expense, designed to determine
the effect of the Licensed Music Sites on consumer awareness of artists
featured in Maverick Videos and sales of such artist's records. ADI and
Maverick shall use the results of such research for internal purposes
only. Such market research shall be subject to the approval of any
applicable artists (but only if required by written agreement between
ADI and such artist) and shall be subject to the published privacy
policy of the applicable Licensed Music Site (if any). Nothing
contained herein shall be deemed to require Maverick to conduct any
such market research.
9. WARRANTIES AND INDEMNITY
9.01 ADI's Warranties
ADI represents and warrants that:
(a) ADI has full right and authority to enter into and to fulfill all of
ADI's obligations under this Agreement; and
(b) ADI shall comply with all licenses, laws and regulations relating to
its maintenance and transmission of Licensed Music Sites.
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9.02 Maverick's Warranties
(a) Maverick represents and warrants that Maverick has the right to enter
into and fulfill all of Maverick's obligations under this Agreement;
and
(b) Maverick makes no representation or warranty whatsoever with respect to
the non-dramatic performing rights in the musical compositions embodied
in the Maverick Videos.
9.03 Indemnity
(a) ADI does hereby indemnify, save and hold harmless Maverick and
Maverick's subsidiaries, affiliates, licensees, assigns, officers and
employees from any and all loss and damage (including, without
limitation, reasonable fees and disbursements of counsel incurred by
Maverick in any action or proceeding between ADI and Maverick or
between Maverick and any third party or otherwise) arising out of or
connected with any claim or act or omission by ADI which is
inconsistent with any of the representations or agreements made by ADI
in this Agreement or any breach of ADI's obligations hereunder or any
unauthorized use by ADI or any party acting on behalf of ADI of Masters
or Maverick Videos in connection with the advertising, promotion or
publicity of each Maverick Video or the name or likeness of any artist
who rendered services in connection with such Maverick Videos. Maverick
shall have the right at all times, in Maverick's sole discretion and at
Maverick's sole cost and expense, to retain or resume control of the
conduct relative to the defense of any claim to which the foregoing
indemnity applies. The foregoing indemnity shall be limited to claims
reduced to judgment or settled with ADI's prior written consent not to
be unreasonably withheld.
(b) Maverick does hereby indemnify, save and hold harmless ADI and ADI's
subsidiaries, affiliates, licensees, assigns, officers and employees
from any and all loss and damage (including, without limitation,
reasonable fees and disbursements of counsel incurred by ADI in any
action or proceeding between ADI and Maverick or between ADI and any
third party or otherwise) arising out of our connected with any claim
or act or omission by Maverick which is inconsistent with any of the
representations or agreements made by Maverick in this Agreement or any
breach of its obligations hereunder or any claim that any Maverick
Video or the content thereof violates the rights of any third party,
including, without limitation, libel, slander, defamation, copyright,
trademark, and rights of privacy and publicity. ADI shall have the
right at all times, in ADI's sole discretion and at ADI's sole cost and
expense, to retain or resume control of the conduct relative to the
defense of any claim to which the foregoing indemnity applies. The
foregoing indemnity shall be limited to
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claims reduced to judgment or settled with Maverick's prior written
consent not to be unreasonably withheld.
(c) The indemnitor shall give the indemnitee prompt written notice of any
claim to which the foregoing indemnity applies, and the indemnitor
shall have the right to participate in the defense of any such claim
through counsel of the indemnitor's own choice and at the indemnitor's
cost and expense.
10. TERMINATION
10.01 Maverick's Termination RightsMaverick may terminate this Agreement
immediately by written notice to ADI if, at any time during the Term:
(a) ADI goes in liquidation, receivership or administration or becomes
bankrupt, makes any arrangement for the benefit of ADI's creditors or
has a receiver appointed for any of ADI's assets; provided, that if
such proceeding is involuntary, then Maverick shall not have the right
to terminate the Term unless such proceeding is not dismissed within 90
days of the filing thereof;
(b) ADI breaches any material term or provision of this Agreement;
(c) the Licensed Music Sites cease, except for any instance of force
majeure, to be transmitted for a continuous period of 10 days; or
(d) if ADI does not succeed in preventing a Circumvention Event within 60
days following ADI's becoming aware thereof; provided, in the case of
any event set forth in subparagraph (b) above, Maverick shall have
given ADI written notice of such event and ADI shall have failed to
cure same within 30 days after ADI's receipt of such notice (or 10
business days if the event is ADI's failure to pay Maverick a sum
certain).
10.02 ADI's Termination Rights
ADI may terminate this Agreement immediately by written notice to
Maverick if: (a) at any time during the Term, Maverick goes into
liquidation, receivership or administration or becomes bankrupt, makes
any arrangement for the benefit of Maverick's creditors or has a
receiver appointed for any of Maverick's assets; provided, that if such
proceeding is involuntary, then ADI shall not have the right to
terminate the Term unless such proceeding is not dismissed within 90
days of the filing thereof; or (b) if Maverick breaches any material
term or provision of this Agreement and fails to cure such breach
within 30 days after ADI's written notice to Maverick of such breach.
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11. PROCEDURE UPON TERMINATION. Upon the expiration or termination of this
Agreement:
(a) ADI shall cease the Streaming of Maverick Videos on Licensed Music
Sites;
(b) ADI shall perform in accordance with the provisions of subparagraph
4.02(c); and
(c) should ADI terminate this Agreement pursuant to subparagraph 10.02
above, ADI shall have no further obligations to Maverick and Maverick
shall have no further obligations to ADI.
12. MISCELLANEOUS
12.01 Relationship of the Parties In performing its obligations under this
Agreement, each of the parties hereto shall be deemed an independent
contractor, and nothing in this Agreement shall in any way constitute
either party, or any of such party's officer or directors, an agent or
employee of the other party and this Agreement shall not be deemed to
constitute a partnership, joint venture or contract of employment
between the parties.
12.02 Service of Notices Any notice which either party hereto may desire to
give or which is required under the terms of this Agreement shall be
given in writing by registered or certified mail, return receipt
requested, or by telefax or by personal service (in all cases, all
charges prepaid) to ADI at the address first noted in the preamble to
this Agreement, Attn: Chief Financial Officer, or to such other address
to which ADI notifies Maverick in writing, with copies to Lenard &
Gonzalez, LLP, 1900 Avenue of the Stars, 25th Floor, Los Angeles,
California 90067, Attn: Allen D. Lenard, Esq., and to Maverick to the
address first noted in the preamble to this Agreement, Attn: General
Counsel. In the event any such notice is given by mail, such notice
shall be deemed to be given on the date five business days following
the date of such mailing. In the event any such notice is given by
personal delivery, such notice shall be deemed to be given on the date
personal delivery is made.
12.03 Confidentiality/Press Announcements Neither ADI nor Maverick nor their
respective affiliates may disclose to any third party (other than each
party's employees and professional advisors, in their capacity as such)
any information regarding the terms and conditions of this Agreement
without the prior written consent of the other party except:
(a) to the extent necessary to comply with the law or the legal process of
a court of competent jurisdiction or in administrative proceedings, in
which event the party making such disclosure must use its commercially
reasonable efforts to procure confidential treatment of such
information;
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(b) as part of its normal reporting or review procedure to its parent
companies, its auditors and its attorneys, provided that ADI and
Maverick inform these parties of the provisions of this subparagraph
12.03;
(c) to the extent necessary to comply with Maverick's contractual
obligations to third parties;
(d) to make press announcements approved in writing by both of the parties;
and
(e) to the extent such terms become public through no breach by either
party of this subparagraph 12.03.
In addition to the foregoing, ADI shall not disclose to any third party
(other than to ADI's employees, in their capacity as such): (i) the
identity of the Maverick Videos Streamed on a Licensed Music Site; (ii)
the number of Maverick Videos Streamed on a Licensed Music Site; or
(iii) the number of times that any Maverick Video was Streamed on a
Licensed Music Site.
12.04 Assignment/Sublicense Maverick may not assign, sublicense or
effectively assign or sublicense Maverick's rights or obligations under
this Agreement except to an affiliated or associated company or to a
person or entity acquiring all or substantially all of the stock or
assets of Maverick and subject to the assignee assuming Maverick's
obligations hereunder. ADI may not assign, sublicense or effectively
assign or sublicense any of ADI's rights or obligations under this
Agreement to any party. For the avoidance of doubt, ADI may not
syndicate ADI's programming containing Maverick Videos.
12.05 No Waiver No failure to exercise or delay in exercising any right,
power or privilege under this Agreement by either party shall operate
as a waiver of that right, power or privilege. Similarly, a single or
partial exercise of any right, power or privilege by either party shall
not preclude any other or further exercise of that right, power or
privilege.
12.06 Remedies Cumulative/Severability The rights and remedies contained in
this Agreement are cumulative and are not exclusive of any rights and
remedies provided by law, in equity or otherwise. If any provision of
this Agreement is prohibited by or contravenes any applicable law, or
is held by any court of competent jurisdiction or any other legally
constituted body having jurisdiction to make this determination to be
void, unlawful or unenforceable then that provision shall be severed
from the Agreement and rendered ineffective, as far as possible,
without modifying the remaining provisions of this Agreement.
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12.07 Entire Agreement/Amendments/Counterparts This Agreement contains the
entire agreement between the parties with respect to its subject matter
and supersedes any prior agreement or negotiation between the parties
on the subject matter of this Agreement. There are no representations,
agreements or understandings, oral or written, between the parties
relating to the subject matter of this Agreement which are not fully
expressed in this Agreement. No amendment, termination, waiver,
discharge or modification of this Agreement shall be effective unless
it is in writing and is signed by an authorized signatory of both
Maverick and ADI. This Agreement may be executed in one or more
counterparts and by facsimile signature, each of which shall be deemed
an original and all of which together shall be deemed one Agreement.
12.08 Litigation ADI shall notify Maverick if ADI becomes aware of any
unauthorized dealing by any third party in any Maverick Videos or in
Licensed Music Sites, and shall cooperate fully, at Maverick's cost, in
any dispute relating to Maverick's rights in Masters and Maverick
Videos as well as Maverick's rights under this Agreement. Maverick,
after written notice to ADI, may, at Maverick's sole cost and expense,
act in the name of ADI and Maverick to protect Maverick's rights under
this Agreement and ADI appoints Maverick ADI's attorney-in-fact to do
this; provided, however, that Maverick shall not be permitted to
execute any document on behalf of ADI without first affording ADI a
reasonable opportunity to execute such document itself. If Maverick
acts on ADI's behalf as permitted herein, Maverick shall keep ADI
informed on a current basis of such acts and all proceedings relating
thereto.
12.09 Governing Law This agreement has been entered into in the state of New
York, and the validity, interpretation and the laws of the state of New
York shall govern the legal effect of this Agreement. The New York
courts (state and federal), only, shall have jurisdiction of any
controversies regarding this Agreement; any action or other proceeding
which involves such a controversy shall be brought in these courts, in
New York County, and not elsewhere. Any process in any such action or
proceeding may, among other methods, be served upon ADI or Maverick, as
applicable, by delivering it or mailing it, by registered or certified
mail, return receipt requested, directed to the address first above
written. Any such delivery or mail service shall be deemed to have the
same force and effect as personal service within the state of New York.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date first above written.
ACCEPTED AND AGREED:
MAVERICK RECORDING COMPANY ARTISTdirect, INC.
By: /s/ GUY OSEARY By: /s/ KEITH YOKOMOTO
------------------------------ ---------------------------
Name: Guy Oseary Name: Keith Yokomoto
Title: Co-Chief Executive Officer Title: President and
Chief Operating Officer
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