Advertising, Promotion and Marketing Agreement - MP3.com Inc. and Montaigne Participations et Gestion
AMENDED AND RESTATED
ADVERTISING, PROMOTION AND MARKETING AGREEMENT
THIS AMENDED AND RESTATED ADVERTISING, PROMOTION AND MARKETING
AGREEMENT ("AGREEMENT") is made and entered into as of September 29, 2000
("EFFECTIVE DATE"), by and among MP3.COM, INC., a Delaware corporation
("MP3.COM"), having an address at 4790 Eastgate Mall, San Diego, CA 92121, and
MONTAIGNE PARTICIPATIONS ET GESTION, a French corporation (formerly named Groupe
Arnault) ("Buyer"), having an address at 41 Avenue Montaigne, 75008 Paris,
France. MP3.com and Buyer may be referred to individually as a "PARTY" and
collectively as the "PARTIES." MP3.com owns and operates the website located at
www.mp3.com (the "WEBSITE").
RECITALS
A. WHEREAS, MP3.com and Buyer entered into an Advertising, Promotion and
Marketing Agreement dated July 10, 1999 ("ORIGINAL AGREEMENT"); and
B. WHEREAS, the Parties, pursuant to Section 14.2 of the Original
Agreement, now wish to supersede and replace the Original Agreement in
its entirety with this Agreement, which shall govern the future
performance of the Parties as it relates thereto.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth in this Agreement, and for other good and valuable consideration, the
receipt and adequacy of which the Parties acknowledge, the Parties mutually
agree as follows:
1. PURPOSE OF THIS AGREEMENT.
1.1 AMENDMENT AND RESTATEMENT OF ORIGINAL AGREEMENT. In
accordance with to Section 14.2 of the Original Agreement, the Original
Agreement is superseded and replaced in its entirety by this Agreement.
[...***...].
1.2 ADVERTISING, PROMOTION AND MARKETING PURCHASE COMMITMENT.
This Agreement sets forth the terms and conditions under which Buyer will
purchase one hundred and twenty million US dollars ($120,000,000) of
advertising, promotion and marketing services to be provided by MP3.com.
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2. ADVERTISING, PROMOTION AND MARKETING.
2.1 MEDIA; PURCHASE COMMITMENT. Buyer agrees to purchase from
MP3.com various advertising, promotional and marketing items and services, in
the amounts and in the manner set forth in this SECTION 2. Such items and
services shall include, but not be limited to, banner ads, portals, graphical
buttons, e-mail marketing sponsorships, event and tour sponsorships, CD sampler
sponsorships, webcast sponsorships, co-branded media programs, artist
acquisition programs, artist and consumer education programs, other sponsorships
and on- and off-line promotions and related services (collectively, "MEDIA").
Subject to the payment conditions in SECTION 2.4, Buyer further agrees that it
shall purchase, on a prepaid basis for each quarter during the Term (as defined
in SECTION 15.1) (each, a "QUARTER"), no less than the full dollar amount of
Media for such Quarter as set forth on EXHIBIT A attached hereto. Should Buyer
(together with its Affiliates and [...***...], each as defined below) not fully
use any amount of Media that it has paid for in any given Quarterly period
(except as provided in SECTION 12 herein), all of Buyer's rights to such Media
shall terminate, all payment obligations of Buyer shall remain in effect and any
advance payments for such Quarter shall remain the sole property of MP3.com with
no further obligations whatsoever with respect to the Media scheduled for such
Quarter.
2.2 QUARTERLY MEDIA ALLOCATION; DEFAULT ALLOCATION. [...***...]
no later than forty-five (45) days prior to the beginning of each Quarter,
MP3.com shall submit to Buyer [...***...]. The [...***...]. Buyer and MP3.com
shall initiate substantive discussions with each other no later than thirty (30)
days prior to the beginning of each Quarter to determine the allocation and
location of Buyer's quarterly payment obligation [...***...]. At Buyer's
request, MP3.com will also meet with Buyer in person or telephonically, upon
reasonable notice, in advance of thirty (30) days prior to the beginning of a
Quarter to discuss the allocation and location of Buyer's quarterly payment
obligation for that Quarter. In addition, [...***...]. If a mutually acceptable
allocation and location is not agreed upon and set forth in a written document
signed by Buyer and MP3.com no later than seven (7) days prior to the beginning
of the applicable Quarter, then (subject to the immediately following sentence)
such Quarter's Media shall be allocated and located by MP3.com [...***...] (the
"DEFAULT ALLOCATION"). If MP3.com (in its sole discretion) and Buyer (also in
its sole discretion) are able to agree on an allocation and location of a
particular Quarter's Media [...***...] then such agreed upon allocation and
location [...***...]. The Media allocation finally agreed upon or established by
MP3.com in accordance with this Section may [...***...]. MP3.com and Buyer agree
to negotiate in good faith with respect to the type, quantity, frequency and
placement of the Media to be purchased during each Quarter [...***...].
2.3 PRICING FOR MEDIA. Notwithstanding anything in this Agreement
to the contrary, Buyer shall be required to pay, for any particular form of
Media to be delivered in any Quarter, a rate equal to the average price paid to
MP3.com by its three (3) largest purchasers (based on the aggregate price paid
for such particular type of Media, [...***...]) for such particular type of
Media (or, if there are less than three purchasers during such period,
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such lesser number of purchasers) ("TOP 3 PURCHASERS") in the three (3) month
period encompassing the first two (2) months of the immediately preceding
Quarter and the last month of the Quarter prior to the immediately preceding
Quarter (the "MEASURING PERIOD"); provided, that in no event shall such rate
exceed MP3.com's standard published pricing rate for such type of Media. If
there were no purchasers of a particular type of Media in the Measuring Period,
Buyer and MP3.com shall negotiate in good faith to determine the appropriate
rate for such type of Media. For the purposes of determining the average price
paid to MP3.com by the Top 3 Purchasers, MP3.com may exclude [...***...] and
[...***...]. Notwithstanding the foregoing, [...***...] For the purposes of this
Section 2.3, [...***...].
2.4 ADDITIONS TO MEDIA MENU. If Buyer desires to purchase Media
other than the products and services [...***...] Buyer shall submit a request
for the additional Media at least thirty (30) days prior to the beginning of the
applicable Quarter. MP3.com and Buyer shall negotiate in good faith to determine
the quantity, frequency, placement and price of the Media requested, as well as
whether such requests can reasonably be accommodated. If the Parties are unable
to reach agreement on the additional Media within fifteen (15) days prior to the
beginning of the applicable Quarter, the Media allocation process set forth in
SECTION 2.2 shall determine the allocation of Media for such Quarter.
2.5 PAYMENT. MP3.com acknowledges that Buyer prepaid to MP3.com
forty-five million US dollars ($45,000,000) in connection with the execution of
the Original Agreement. Buyer's payment obligations from the fourth Quarter of
1999 through the third Quarter of 2000 accounted for thirty-one and one-half
million US dollars ($31,500,000) of that prepaid amount. Buyer's payment
obligation for the fourth Quarter of 2000 is thirteen and one-half million US
dollars ($13,500,000), which MP3.com shall deduct from the prepaid amount.
Beginning with the first Quarter of 2001 and for the remainder of the Term, on
the first day of the first month for each Quarter, Buyer shall pay MP3.com
scheduled payments in the exact amount listed on Exhibit A attached hereto by
way of (i) a wire transfer to MP3.com's account at the Imperial Bank, 701 "B"
Street, Suite 600, San Diego, CA 92101, Routing No. 122201444, Account No.
0038-51-008, or any other account previously approved in writing by MP3.com,
(ii) actual delivery of a certified or cashier's check, drawn on an account from
a bank located within the United States and reasonably acceptable to MP3.com, or
(iii) as otherwise agreed to in writing by MP3.com. In the event of the failure
of Buyer to so pay any such amount due, then three days after written notice
thereof from MP3.com to Buyer, MP3.com shall be entitled to draw-down against
the letter of credit described in SECTION 2.6 in an amount equal to such
scheduled payment.
2.6 LATE PAYMENTS; TAXES. Any late payments under this Agreement
will be assessed a service fee of one and one-half percent (1.5%) per month, to
the extent allowed by law. All fees owed by Buyer to MP3.com are exclusive of,
and Buyer shall pay, all sales, use, excise and other taxes which may be levied
upon either Party in connection with this Agreement, except for taxes based on
MP3.com's net income.
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2.7 LETTER OF CREDIT. In connection with the execution of the
Original Agreement, to secure Buyer's payment obligations remaining after
deduction of the prepaid amount described in SECTION 2.5, Buyer caused to be
delivered to MP3.com an irrevocable letter of credit (the "LETTER OF CREDIT") in
the face amount of one hundred and five million US dollars ($105,000,000) naming
MP3.com as beneficiary thereunder and issued by Societe Generale. The Letter of
Credit provides for the drawing of funds upon receipt of a certificate from an
officer of MP3.com. Immediately following the execution of this Agreement, the
Parties shall amend the Letter of Credit (i) to reduce the face amount thereof
to seventy-five million US dollars ($75,000,000), which is the amount of Buyer's
payment obligations hereunder for the period commencing in the first Quarter of
2001 and continuing for the remainder of the Term, (ii) provide that MP3.com may
only draw thereon an amount equal to any Quarterly payment, or part thereof, not
made as provided in SECTION 2.5 above and upon written certification from an
officer of MP3.com to Societe Generale that Buyer has not paid its Quarterly
payment as required by SECTION 2.5 and the amount of such delinquent payment,
and (iii) provide that the face amount thereof shall automatically be reduced
Quarter by Quarter to the extent Buyer so makes any Quarterly payment as
provided in SECTION 2.5 above.
3. [...***...]INCENTIVE FOR ADDITIONAL BRANDS; [...***...]. From and
after January 1, 2001, for each new Brand (as defined below), MP3.com shall
[...***...]. Any such [...***...] shall not exceed a maximum amount of
[..***...]. For the purposes of this Section, [...***...]. Each Brand is only
eligible to be [...***...]. In addition to the foregoing [...***...].
4. [...***...]
5. ADVERTISERS.
5.1 PERMITTED USES OF MEDIA. Buyer may use Media purchased under
this Agreement to advertise, promote or market any products, services or brands,
directly or indirectly, owned or sold by or affiliated with Buyer or any of its
Affiliates. [...***...]. The use of [...***...] Media is conditioned upon
[...***...] granting MP3.com written trademark and content licenses as set forth
in SECTION 7, and delivering its Advertiser Content (as defined in SECTION 6) to
MP3.com by the relevant Delivery Date pursuant to SECTION 6. The minimum amount
of [..***...] and [...***...]
5.2 COORDINATION WITH MP3.COM [...***...]. [...***...].
5.3 DEDICATED REPRESENTATIVE. Within ninety (90) days of the
Effective Date, Buyer shall designate an individual who shall be dedicated to
discharging Buyer's obligations under this Agreement and coordinating all of the
Media and [...***...] provided hereunder. Buyer shall maintain such a dedicated
representative hereunder at least through the end of 2002. Such dedicated
representative shall have the responsibility, among other responsibilities, of
assuring that the quarterly media allocation contemplated in SECTION 2.2 is
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accomplished in a timely manner and that the requirements set forth in this
SECTION 5 [...***...] are satisfied in all respects.
6. DELIVERY OF ADVERTISER CONTENT. Buyer, Buyer's Affiliate,
[...***...] as applicable, will deliver to MP3.com their respective
advertisements and such other materials, logos and designs as may be reasonably
requested by MP3.com in connection with the performance of MP3.com's obligations
under this Agreement. Any and all such items so delivered are hereinafter
collectively referred to as "ADVERTISER CONTENT." In the event that any
Advertiser Content as delivered does not conform to the technical specifications
required by MP3.com and such deficiency is not corrected by the Delivery Date,
or any Advertiser Content does not arrive by the applicable Delivery Date, then
MP3.com may, in its discretion: (i) refuse such Advertiser Content and, if
available, substitute any prior Advertiser Content in MP3.com's possession, (ii)
delay delivery of the related Media until Buyer, Buyer's Affiliate or
[...***...] as applicable, shall have delivered a corrected copy of such
Advertiser Content or (iii) if MP3.com is not in possession of any prior
Advertiser Content, provide Buyer, Buyer's Affiliate [...***...] as applicable,
with written notification (which may be given via email) of the non-delivery or
deficiency, as applicable, in which event (X) Buyer, Buyer's Affiliate
[...***...] as applicable, shall have ten (10) days to cure such non-delivery or
deficiency and (Y) if such non-delivery or deficiency remains uncured at the end
of such 10 day period, Buyer's, Buyer's Affiliate's [...***...] rights to the
related Media, as applicable, shall terminate and MP3.com shall have no further
obligations with respect to such Media. At all times, MP3.com will use its best
efforts to emulate and display Advertiser Content with a similar quality of
presentation and an overall look-and-feel of the Buyer, Buyer's Affiliates
[...***...] brands to which the Advertiser Content relates.
7. LICENSE.
7.1 ADVERTISER CONTENT LICENSE. MP3.com's obligation to deliver
Media under this Agreement is conditioned upon Buyer, Buyer's Affiliates
[...***...] as applicable, granting to MP3.com a non-exclusive,
non-transferable, royalty-free, worldwide license to use, reproduce, distribute,
create translations or other derivative works of, publicly perform, publicly
display and digitally perform Advertiser Content on or in conjunction with the
Website and the Media delivered hereunder, solely in connection with MP3.com's
implementation of this Agreement. Title to and ownership of all intellectual
property rights of the Advertiser Content shall remain with Buyer, Buyer's
Affiliates [...***...] as applicable, or their third party licensors. MP3.com
hereby confirms that the foregoing license shall be used solely in connection
with the production and delivery of Media under this Agreement.
7.2 TRADEMARKS. MP3.com's obligation to deliver Media under this
Agreement is conditioned upon Buyer, Buyer's Affiliates [...***...] as
applicable, granting to MP3.com a non-exclusive, nontransferable, royalty-free,
worldwide license to use Buyer's, Buyer's Affiliates' [...***...] as applicable,
trademarks, service marks, trade names, logos, or
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other commercial or product designations (collectively, "MARKS") on the Website
for the purposes of marketing, promotion, and content directories or indexes,
and in electronic or printed advertising, publicity, press releases, newsletters
and mailings about the Website or MP3.com. MP3.com shall not use Marks for any
purpose whatsoever without the prior written consent of the Marks' owner, which
shall not be unreasonably withheld or delayed.
8. PROPRIETARY RIGHTS AND CONFIDENTIAL INFORMATION.
8.1 CONFIDENTIAL INFORMATION. This Agreement creates a
confidential relationship between the Parties. Each Party acknowledges and
agrees that the terms of this Agreement and any information conveyed to or
obtained by one Party (the "RECIPIENT") from the other Party (the "DISCLOSING
PARTY") in connection with this Agreement, including trade secrets, know-how,
software, source code, information regarding each Party's customers, providers
or suppliers, business plans or operations, technical data, or other business or
financial information is confidential and proprietary to the Disclosing Party
(the "CONFIDENTIAL INFORMATION"). The Recipient agrees that in no event shall it
disclose, transfer, copy, duplicate, translate, or publish any Confidential
Information except as necessary for Recipient to implement this Agreement
[...***...]. The Recipient further agrees that it shall not use any Confidential
Information for any purpose whatsoever, whether for its own benefit or the
benefit of any third party, other than for performing its obligations under this
Agreement. The Recipient shall only make available the Confidential Information
to its employees, agents, affiliates and permitted subcontractors on a
need-to-know basis who contractually agree to abide by the restrictions herein
prior to any such disclosure. The Recipient shall be responsible for the
unauthorized use or disclosure of any Confidential Information by its employees,
agents, affiliates or subcontractors. Upon the termination or expiration of this
Agreement for any reason or upon the earlier written request of the Disclosing
Party, the Recipient will return all documents and other materials in
Recipient's control that contain or relate to Confidential Information. Upon the
written request of the Disclosing Party, the Recipient shall provide a written
certification to the Disclosing Party that it has returned to the Disclosing
Party or destroyed, at the Disclosing Party's option, all such Confidential
Information, and purged all Confidential Information from its electronic files
and systems. Recipient acknowledges and agrees that Disclosing Party owns all
copyright, trademark, trade secret, know-how, patent, data or other intellectual
property rights in Disclosing Party's Confidential Information.
8.2 EXCEPTIONS. The restrictions in SECTION 8.1 shall not apply
to any Confidential Information that: (i) was in the public domain before it was
disclosed or has entered the public domain through no fault of the Recipient;
(ii) was known to the Recipient, without restriction, prior to the time of
disclosure; (iii) was disclosed with the prior written approval of the
Disclosing Party; (iv) was entirely independently developed by the Recipient
without any use of the Confidential Information, or (v) was disclosed by a third
party to the Recipient without breach by such third party of any confidentiality
obligation to the Disclosing Party. In addition, Recipient may disclose the
Disclosing Party's Confidential Information as necessary to comply with
applicable laws and regulations (such as disclosure to the SEC or its foreign
equivalent), or to comply with a court or administrative order; provided,
however, that
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the Recipient shall provide prior written notice thereof to the Disclosing Party
and that the Recipient takes all reasonable and lawful actions to obtain
confidential treatment (if possible) for such disclosure, and, to minimize the
extent of such disclosure.
8.3 IRREPARABLE HARM. Each Party acknowledges that the
Confidential Information is a valuable asset of the Disclosing Party and that
the breach of this SECTION 8 would cause the Disclosing Party irreparable harm
for which there is no adequate remedy at law. Accordingly, notwithstanding
SECTION 16.5, in the event of a breach or alleged breach of this SECTION 8, the
Disclosing Party shall be allowed to seek injunctive relief and any other
equitable remedies, wherever it deems appropriate, in addition to all other
remedies afforded to it by law. The obligations of the Parties pursuant to this
SECTION 8 shall survive the termination or expiration of this Agreement for a
period of eighteen (18) months.
9. REPORTS. Within sixty (60) days of the end of each Quarter,
MP3.com will provide Buyer with reports summarizing the quantity, frequency,
placement and distribution of the Media delivered during the preceding Quarter.
Buyer acknowledges and agrees that any statistics or other information provided
to Buyer pursuant to this SECTION 9 shall be deemed the Confidential Information
of MP3.com and shall be subject to the provisions of SECTION 8.
10. RECORDS AND AUDITS. MP3.com shall keep complete and accurate
records pertaining to the pricing and sale or other disposition of the Media in
sufficient detail to permit Buyer to confirm the accuracy of all purchases made,
and the satisfactory performance by MP3.com of all its obligations, hereunder.
Buyer shall have the right to cause an independent, certified public accountant
reasonably acceptable to MP3.com to audit such records to confirm the
determination of pricing, and the satisfactory performance by MP3.com of all its
obligations, hereunder for the preceding year. Such audits may be exercised
during normal business hours upon at least twenty-one (21) days' prior written
notice to MP3.com. Audits may be conducted no more than once in any calendar
Quarter. Buyer shall bear the full cost of any such audits.
11. REPRESENTATIONS AND WARRANTIES.
11.1 ADVERTISER MATERIAL. Buyer shall be solely responsible to
MP3.com for any legal liability arising out of or relating to any or all
Advertiser Content and any material to which users can link through the
Advertiser Content (collectively, the "ADVERTISER MATERIAL"). Buyer represents
and warrants that the Advertiser Material does not and will not at any time
during the Term: (a) infringe on any third party's copyright, patent, trademark,
trade secret or other proprietary right or right of publicity or privacy; (b)
violate any applicable law, statute, ordinance or regulation, including laws and
regulations governing export control, unfair competition, antidiscrimination or
false, misleading or deceptive advertising; (c) be defamatory or trade libelous;
(d) be harmful to minors, obscene or pornographic; (e) be materially false,
misleading, inaccurate or incapable of reasonably prompt fulfillment, or (f)
contain viruses, trojan horses, worms, time bombs, cancelbots or other similar
harmful or deleterious programming routines. Buyer agrees to defend, indemnify
and hold harmless MP3.com and its directors, officers, agents and employees for
any and all losses, costs, liabilities or expenses
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(including reasonable attorneys' and expert witnesses' fees) which are incurred
or suffered by MP3.com in connection with: (i) the breach by Buyer of any
representation or warranty in this Agreement; (ii) any Advertiser Material;
(iii) any transaction involving Buyer's, Buyer's Affiliate's [...***...] as
applicable, goods or services; or (iv) any other act, omission or representation
by Buyer, Buyer's Affiliates [...***...] as applicable,. MP3.com may participate
in the defense at its option and expense.
11.2 USE OF ADVERTISER CONTENT. MP3.com represents and warrants
that it shall not place Advertiser Content next to, with or on the same Website
page as other content that: (a) infringes on any third party's copyright,
patent, trademark, trade secret or other proprietary rights or right of
publicity or privacy; (b) violates any applicable law, statute, ordinance or
regulation, including laws and regulations governing export control, unfair
competition, antidiscrimination or false, misleading or deceptive advertising;
(c) is defamatory or trade libelous; (d) is harmful to minors, obscene or
pornographic; (e) is materially false, misleading, inaccurate or incapable of
reasonably prompt fulfillment, or (f) contains viruses, trojan horses, worms,
time bombs, cancelbots or other similar harmful or deleterious programming
routines. MP3.com agrees to defend, indemnify and hold harmless Buyer and its
directors, officers, agents and employees for any and all losses, costs,
liabilities or expenses (including reasonable attorneys' and expert witnesses'
fees) which are incurred or suffered by Buyer, Buyer's Affiliates, [...***...]
as applicable, in connection with: (w) the breach by MP3.com of any
representation or warranty in this Agreement; (x) any content on the MP3.com
Website other than Advertiser Material; (y) any transaction involving MP3.com's
goods or services; or (z) any other act, omission or representation by MP3.com.
Buyer, Buyer's Affiliates, or any [...***...] as applicable, may participate in
the defense at its option and expense.
11.3 MECHANICS OF INDEMNITY. The indemnifying party's obligations
hereunder are conditioned upon the indemnified party: (i) giving the
indemnifying party prompt written notice of any claim for which the indemnified
party is seeking indemnity; (ii) granting control of the defense and settlement
to the indemnifying party (except that the indemnifying party may not effect any
settlement or make any admission of fault, liability or similar admissions
without the consent of the indemnified party, other than for the payment of
money damages in a single lump sum); and (iii) reasonably cooperating with the
indemnifying party at the indemnifying party's expense.
11.4 DUE AUTHORIZATION. Each Party represents and warrants that (i) it has all
necessary corporate power and authority under all applicable provisions of law
to execute and deliver this Agreement and to carry out its provisions; (ii) it
has effectively taken all corporate action required for the lawful execution and
delivery of this Agreement; and (iii) upon its execution and delivery, this
Agreement will be a valid and binding obligation, enforceable in accordance with
its terms, except (a) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application affecting
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enforcement of creditors' rights and (b) general principles of equity that
restrict the availability of equitable remedies.
12. DISCLAIMER OF WARRANTIES; LIMITED REMEDY. Except as set forth in
SECTION 11.2, MP3.com provides the Website and all services performed hereunder
"AS IS" and without any warranty of any kind. EXCEPT AS SET FORTH IN SECTION
11.2, MP3.COM MAKES NO REPRESENTATIONS, WARRANTIES OR GUARANTEES OF ANY KIND,
EITHER EXPRESS OR IMPLIED WITH RESPECT TO THE MEDIA PROVIDED, THE ADVERTISER
CONTENT, THE WEBSITE, OR THE FUNCTIONALITY, PERFORMANCE OR RESULTS OF USE
THEREOF, INCLUDING ANY WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE OR OTHER WARRANTIES ARISING BY USAGE OF TRADE, COURSE OF DEALING OR
COURSE OF PERFORMANCE. MP3.com does not guarantee continuous or uninterrupted
display or distribution of any Advertiser Content. In the event of interruption
of display or distribution of the Advertiser Content, MP3.com's sole obligation
shall be to restore service as soon as commercially practicable (except as
provided in SECTION 15.3 below). If MP3.com does not deliver a specific Media
that it had previously agreed to deliver within a given Quarter, Buyer's sole
and exclusive remedy, in lieu of all others (except as provided in SECTION 15.3
below), shall be to receive a refund of an amount equal to the dollar amount
allocated for that specific Media in such Quarter; provided, however, that if
such failure to deliver specific Media is due to an interruption in service on
the Website, in lieu of such a refund, MP3.com agrees to deliver the specific
Media as soon as practicable after service is resumed, but in no event later
than in the following Quarter.
13. CONSEQUENTIAL DAMAGES DISCLAIMER. IN NO EVENT SHALL ANY PARTY HERETO
BE LIABLE FOR ANY SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES
(INCLUDING TO SUCH DAMAGES ARISING FROM BREACH OF CONTRACT OR WARRANTY OR FROM
NEGLIGENCE OR STRICT LIABILITY), OR FOR INTERRUPTED COMMUNICATIONS, LOSS OF USE,
LOST BUSINESS, LOST DATA OR LOST PROFITS, INCOME OR GOODWILL, THE REJECTION OR
REMOVAL OF ANY ADVERTISER CONTENT, OR ANY DELAY IN DISPLAYING OR THE FAILURE TO
DISPLAY ANY ADVERTISER CONTENT, ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT.
14. LIMITATION OF LIABILITY. NOTWITHSTANDING ANY OTHER PROVISIONS OF
THIS AGREEMENT, MP3.COM'S AGGREGATE LIABILITY TO BUYER AND/OR ANY THIRD PARTY
UNDER ANY CLAIMS RELATING TO OR ARISING OUT OF THIS AGREEMENT SHALL NOT EXCEED
AN AMOUNT GREATER THAN THE AMOUNTS RECEIVED UNDER THIS AGREEMENT DURING THE
TWELVE (12) MONTH PERIOD IMMEDIATELY PRECEDING SUCH CLAIM.
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15. TERM AND TERMINATION.
15.1 TERM OF AGREEMENT. The term of this Agreement shall commence
on the Effective Date and shall remain in full force and effect until December
31, 2004 ("TERM"), unless earlier terminated in accordance with SECTION 15.2 or
15.3.
15.2 TERMINATION FOR DEFAULT. Buyer or MP3.com may terminate this
Agreement pursuant to any of the following subsections:
(a) Immediately upon written notice if the other Party
breaches a material term or condition of the Agreement and does not cure such
breach (or commence a cure in a manner reasonably satisfactory to the
non-breaching party) within ninety (90) days (or ten (10) days in the event of
nonpayment of money) after written notice of such breach; or
(b) Immediately upon written notice if the other Party
ceases to do business, or otherwise terminates its business operations, except
as a result of a permitted assignment; or
(c) Immediately upon written notice if the other Party fails
to promptly secure or renew any license, registration, permit, authorization or
approval for the conduct of its business in the manner contemplated by this
Agreement or if any such license, registration, permit, authorization or
approval is revoked or suspended.
15.3 CESSATION OF WEBSITE. Buyer shall have the right to
terminate this Agreement immediately upon written notice if MP3.com's Website
ceases to operate or be functional for a period of thirty (30) consecutive days.
15.4 RIGHTS AND OBLIGATIONS UPON TERMINATION. In the event this
Agreement expires or is terminated, each Party shall cooperate with the other
Party to effect an orderly termination of the relationship created by this
Agreement, including each Party's prompt return of any Confidential Information.
Termination of this Agreement shall not limit any Party from pursuing other
remedies available to it, including injunctive relief. The Parties' rights and
obligations under SECTIONS 8 (for a period of eighteen (18) months), 11, 12, 13,
14, 15.4 and 16 shall survive any termination or expiration of this Agreement.
16. GENERAL PROVISIONS.
16.1 ENTIRE AGREEMENT. This Agreement, together with any Exhibits
attached hereto and incorporated herein, represents the sole, final and entire
agreement between the Parties with respect to the subject matter hereof and
shall supersede and terminate all prior or contemporaneous agreements and
communications of the Parties, oral or written, including the Original
Agreement, other than the IPO Agreement.
16.2 NON-DISPARAGEMENT. Each Party agrees not to disparage the
other Party as to its products, services or business in any way.
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16.3 AMENDMENT AND WAIVER. No amendment to, or waiver of, any
provision of this Agreement shall be effective unless in writing and signed by
the Parties. The waiver by any Party of any breach or default shall not
constitute a waiver of any different or subsequent breach or default.
16.4 CONSTRUCTION. Whenever used in this Agreement, the singular
shall include the plural and vice versa (where applicable), the use of the
masculine, feminine or neuter gender shall include the other genders (unless the
context otherwise requires), the words "hereof," "herein," "hereto," "hereby,"
"hereunder," and other words of similar import refer to this Agreement as a
whole (including all schedules and exhibits), the words "include," "includes,"
and "including" shall mean "include, without limitation," "includes, without
limitation," and "including, without limitation," respectively. Headings of
Sections and subsections are for convenience of reference only, and shall not be
construed as part of this Agreement, or as limiting or defining the scope of any
term or provision hereof.
16.5 GOVERNING LAW. This Agreement shall be governed by,
interpreted and enforced solely and exclusively in accordance with the laws of
the State of California, USA, without giving effect to principles of conflicts
of laws. All Parties agree to submit to jurisdiction in the State of California,
USA, and further agree that any and all disputes which each Party determines
cannot be resolved amicably, arising under or related to this Agreement shall be
brought and resolved solely and exclusively in a court in San Diego County,
California, USA.
16.6 [...***...].
16.7 SUCCESSORS AND ASSIGNS. No Party shall assign its rights or
obligations under this Agreement without the prior written consent of the other
Party, which shall not unreasonably be withheld or delayed. Notwithstanding the
foregoing, (i) each Party may assign this Agreement to an entity who acquires
substantially all of the stock or assets of a Party to this Agreement and (ii)
[...***...] provided in each of (i) and (ii) above, that (x) in the event Buyer
is the assigning party, the Letter of Credit contemplated by Section 2.6 remains
in place or the assignee provides a substitute letter of credit acceptable to
MP3.com and (y) consent will be required in the event that the non-assigning
Party reasonably determines that the assignee will not have sufficient capital
or assets to perform its obligations hereunder, or that the assignee is a direct
competitor of the non-assigning Party. [...***...] All terms and provisions of
this Agreement shall be binding upon and inure to the benefit of the Parties
hereto and their respective permitted transferees, successors and assigns.
16.8 FORCE MAJEURE. No Party shall be liable for failure to
perform or delay in performing any obligation (other than the payment of money)
under this Agreement if such failure or delay is due to fire, flood, earthquake,
strike, war (declared or undeclared), embargo, blockade, legal prohibition,
governmental action, riot, insurrection, damage, destruction or any other
similar cause beyond the control of such Party.
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<PAGE> 12
16.9 NOTICES. All notices, requests and other communications
called for by this Agreement shall be deemed to have been given (i) on the day
of delivery as evidenced by the courier's delivery records, when delivered by a
reputable international overnight courier service, or (ii) immediately if made
by telecopy or electronic mail (confirmed by concurrent written notice sent via
overnight courier for delivery by the next business day). Notices shall be sent
to MP3.com at 4790 Eastgate Mall, San Diego, CA 92121, attention President
(e-mail: [...***...] with a copy to its Vice President, Legal Affairs (e-mail:
[...***...] and to Buyer (with a copy to James Lieber) at the physical addresses
set forth on the signature page of this Agreement, or to such other addresses as
each Party shall specify to the other Party. Notice by any other means shall be
deemed made when actually received by the Party to which notice is provided.
16.10 COMPLIANCE WITH LAWS. Each Party shall, at its own expense,
comply with all applicable laws, regulations, ordinances, or rules relating to
its duties, obligations and performance under this Agreement and shall procure
all licenses and pay all fees and other charges required thereby.
16.11 PUBLICITY. No press releases or publicity statements or
references to this Agreement may be made without the express prior approval of
the other Party.
16.12 NO OTHER RIGHTS. This Agreement shall not be construed to
grant any rights by implication, estoppel, or otherwise, that are not granted
through the express provisions of this Agreement.
16.13 INDEPENDENT CONTRACTORS. The relationship of the Parties is
solely and exclusively that of independent contractors, and nothing contained in
this Agreement shall be construed to (i) give either Party the power to direct
or control the activities of the other, (ii) constitute the Parties as partners,
joint venturers, agents, employees, co-owners or otherwise as participants in a
joint undertaking, or (iii) allow either Party to create or assume any
obligation on behalf of the other Party for any purpose whatsoever.
16.14 SEVERABILITY. If one or more provisions in this Agreement
are ruled entirely or partly invalid or unenforceable by any court of competent
jurisdiction in any jurisdiction, then (a) the validity and enforceability of
all provisions not ruled to be invalid or unenforceable shall remain unaffected;
(b) the effect of such ruling shall be limited to the jurisdiction of the court
making the ruling; (c) the provision(s) held wholly or partly invalid or
unenforceable shall be deemed amended, and the Parties shall reform the
provision(s) to the minimum extent necessary to render them valid and
enforceable in conformity with the Parties' intent as manifested herein; and (d)
if the ruling, or the controlling principle of law or equity leading to the
ruling, is subsequently overruled, modified, or amended, then the provision(s)
in question, as originally set forth in this Agreement, shall be deemed valid
and enforceable to the maximum extent permitted by the new controlling principle
of law or equity.
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16.15 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which taken together shall constitute a single instrument.
Execution and delivery of this Agreement may be evidenced by facsimile
transmission.
16.16 AUTHORITY. Each of the Parties represents and warrants that
the negotiation and entry of this Agreement will not violate, conflict with,
interfere with, result in a breach of, or constitute a default under any other
agreement to which they are a Party.
16.17 ATTORNEYS' FEES. The prevailing Party in any action to
enforce this Agreement shall be entitled to reimbursement of its expenses,
including reasonable attorneys' fees.
The Parties have caused this Agreement to be duly executed as of the
Effective Date.
MP3.COM, INC MONTAIGNE PARTICIPATIONS ET GESTION
By: /S/ ROBIN RICHARDS By: /s/ NICOLAS BAZIRE
------------------------------------ --------------------------------
Robin Richards Nicolas Bazire
President and Chief Operating Officer Its: Managing Director
Address: Address:
4790 Eastgate Mall 31, Avenue Montaigne
San Diego, CA 92121 75008 Paris
email: legal@mp3.com France
with a copy to:
James Lieber
30, Avenue Hoche
75008 Paris
France
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<PAGE> 14
EXHIBIT A
MEDIA PURCHASE SCHEDULE
<TABLE>
<CAPTION>
QUARTERLY PAYMENT SCHEDULE: PURCHASE AMOUNT:
--------------------------- ----------------
<S> <C> <C> <C>
1999 Q4 $5,000,000*
2000 Q1 $6,500,000*
Q2 $8,500,000*
Q3 $11,500,000*
Q4 $13,500,000*
2001 Q1 $15,000,000
Q2 $12,250,000
Q3 $12,250,000
Q4 $12,250,000
2002 Q1 $6,000,000
Q2 $5,000,000
Q3 $5,000,000
Q4 $5,000,000
2003 Q1 $300,000
Q2 $300,000
Q3 $275,000
Q4 $275,000
2004 Q1 $275,000
Q2 $275,000
Q3 $275,000
Q4 $275,000
------------
TOTAL: $120,000,000
</TABLE>
* -- Amounts prepaid prior to the Effective Date.