EXHIBIT 10.14
Note: Portions of this exhibit indicated by "[*]" are subject to a confidential
treatment request, and have been omitted from this exhibit. Complete, unredacted
copies of this exhibit have been filed with the Securities and Exchange
Commission as part of this company's confidential treatment request.
SERVICES AGREEMENT
This Services Agreement (this "Agreement") is executed as of this 17th day of
December, 1999 (the "Effective Date") by and between xxxxxxxx.xxx, Inc., a
Delaware corporation ("Encoding"), and Valley Media, Inc., a Delaware
corporation ("Valley").
RECITALS
A. Encoding offers services and applications for encoding, optimizing and
delivering audio and video content on the Internet.
B. Valley is a distributor of music and video entertainment products.
C. Valley desires to obtain certain services from Encoding that will allow
Valley to include a digital music sampling service as part of the consumer
database it offers to its retail customers.
AGREEMENT
In consideration of the foregoing and the mutual promises and covenants
contained herein, and for other good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, Valley and Encoding hereby agree
as follows:
1. Definitions. For purposes of this Agreement, the following definitions
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will apply:
1.1. The term "Confidential Information" means any information that one
party (the "Disclosing Party") furnishes or makes available to the
other party (the "Receiving Party") and all information related to the
business of one party (the "Disclosing Party") which the other party
(the "Receiving Party") acquires in the course of performing its
obligations under this Agreement; provided, however, that the term
"Confidential Information" does not include any information that the
Receiving Party can prove (a) is generally available to or known by
the public, (b) was available to or known by the Receiving Party on a
non-confidential basis prior to disclosure by the Disclosing Party,
(c) was independently developed for the Receiving Party by persons who
were not given access to the information disclosed by the Disclosing
Party, or (d) becomes generally known to the public after the
Effective Date through no act or omission of the Receiving Party.
1.2. The term "Major Labels" means, collectively, [*], and (f) any
affiliate, division or subsidiary of any of the entities described in
parts (a) through (e) of this Section 1.2.
2. Inventory Loan. Valley maintains an inventory of compact discs containing
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prerecorded music (each, a "CD" and, collectively, the "CDs"). Valley will [*],
one copy of each stock-keeping unit maintained by Valley among its inventory
of CDs during the term of this Agreement, including the original artwork and
packaging for each such CD (each, a "Loaned CD" and, collectively, the "Loaned
CDs"). Valley will deliver the Loaned CDs to Encoding. Encoding will [*] in
delivering the Loaned CDs. In addition, Encoding will pay Valley a handling
charge of [*] per Loaned CD delivered to Encoding by Valley.
3. Product Information File. Valley maintains an electronic data file
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containing [*] for each recording contained in a CD in its inventory (the
"Product Information File"). Valley will deliver to Encoding, at [*] charge, one
electronic copy of the Product Information File. In addition, during the term of
this Agreement, Valley will deliver to Encoding daily updates of the Product
Information File ("PIF Updates") containing artist and UPC information for
recordings contained in CDs that have been added to Valley's inventory since the
original Product Information File or the last PIF Update was delivered to
Encoding by Valley, whichever was later. For purposes of this Agreement, the
term "Product Information File" means the Product Information File as updated
and/or amended by Encoding to
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incorporate any and all PIF Updates. Valley will not be required to deliver
updates of the Product Information File to Encoding following the termination or
expiration of this Agreement unless the parties agree otherwise.
4. Encoding of Loaned CDs.
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4.1. For each recording contained in a Loaned CD (each, a "Recording" and,
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collectively, the "Recordings"), Encoding will create a storable electronic
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file containing a copy of that Recording in digital form (each, a "Song File"
---- ----
and, collectively, the "Song Files"). Encoding will create each Song File in
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a manner that will allow that Song File to be encoded into each of the
streaming and downloading formats and at each of the data rates described in
Exhibit A hereto, which is incorporated herein by this reference. Valley may
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amend Exhibit A from time to time to include additional streaming and/or
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downloading formats and/or additional data rates, and Encoding will create
Song Files and Song Clips (as defined below) for each Recording in such
additional formats and/or at such additional data rates in accordance with a
schedule agreed upon by both parties. Valley will [*] by Encoding in encoding
the Loaned CDs into such additional formats and/or at such additional data
rates pursuant to this Section 4.1.
4.2. From each Song File, Encoding will create a sound clip (each, a "Song
----
Clip" and, collectively, the "Song Clips") of a length, in each of the
---- ---------------
formats and at each of the data rates described in Exhibit B hereto, which is
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incorporated herein by this reference.
4.3. Encoding will link each Song Clip to that portion of the Product
Information File containing product information for the Recording underlying
the Song Clip, so that users of the Product Information File [*] for a
particular Recording will be able to [*].
4.4. Encoding will create a storable electronic file containing a copy of the
cover art of each Loaned CD in digital form (each, a "Cover Art File" and,
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collectively, the "Cover Art Files". Encoding will incorporate the Cover Art
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Files into the Product Information File so that a digital image of the cover
art for a Loaned CD will appear on each screen viewed by a user of the
Product Information File that contains information regarding a Recording
contained in that Loaned CD.
4.5. After Encoding has created Song Files and Song Clips for each Recording
contained in a Loaned CD, and created a Cover Art File for that Loaned CD,
Encoding will promptly return the Loaned CD to Valley. Valley will [*] in
delivering the returned Loaned CDs. Encoding may return Loaned CDs without
shrink-wrap, and Encoding will use [*] efforts to have each returned Loaned
CD in a condition that would allow Valley to return the Loaned CD to the
vendor from which it was purchased without any refurbishment on Valley's
part; provided, however, if Encoding is not able to return a Loaned CDs in
such returnable condition, Encoding will pay [*] of Valley's wholesale cost
for any such Loaned CD.
4.6. Encoding will update and/or amend the Product Information File on a daily
basis to incorporate the information contained in any and all PIF Updates.
4.7. If, in carrying out its responsibilities under this Agreement, but
without any separate obligation to do so, Encoding becomes aware of a
Recording that is contained in a Loaned CD [*].
4.8. Encoding will attempt to create a customized clip service that will allow
an artist or label to select the portion of a Recording by that artist or
label that is used to create a Song Clip for that Recording. The artist or
label would be required to bear the cost related to the creation of any such
customized Song Clip.
5. Music Sampling Service. Valley and Encoding will use the Product
----------------------
Information File and the Song Clips to create a music sampling service (the
"Sampling Service") that will be sold or licensed to third parties. Encoding
and Valley each will have the right to sell or license the Sampling Service to
third parties; provided, however, that neither Encoding nor Valley may sell,
license or otherwise transfer the Sampling Service or any portion thereof to
[*]. Encoding and Valley will each be responsible for collecting sales revenue
and/or license fees from their respective customers and/or licensees. During the
term of this Agreement, Encoding and Valley will each be entitled to [*] of any
license fees received by the other party for selling or licensing the Sampling
Service, but only to the extent [*]. Encoding will perform the following
services to support the Sampling Service:
5.1. Encoding will store the Song Clips on its business systems and use those
systems to stream the Song Clips to consumers using the Sampling Service. In
hosting and streaming the Sampling Service, Encoding will
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maintain interface capabilities that are consistent with industry
standards. Encoding's right to host and stream the Sampling Service on
behalf of Valley under this Section 5.1. is not exclusive, and Valley may
retain other persons or entities to perform such services in accordance
with the following conditions. Valley will notify Encoding in writing if it
wishes to have hosting and streaming services for the Sampling Service
performed by a person or entity other than Encoding (the "Third Party
Service Provider"). For a period of sixty (60) days following Encoding's
receipt of such notice, Valley and Encoding will negotiate in good faith
regarding Encoding's provision of such services instead of the Third Party
Service Provider. If, at the conclusion of such sixty (60) day period,
Valley and Encoding have not reached an agreement for Encoding to perform
such services after negotiating in good faith, Valley will be permitted to
retain the Third Party Service Provider to perform such services.
5.2. Encoding will collect the data described in Exhibit D hereto (the
---------
"Consumer Data"), which is incorporated herein by this reference, regarding
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the usage and purchasing habits of consumers that use the Sampling Service.
6. Minimum Service Levels. In consideration of the capital expenditures that
----------------------
will be incurred by Encoding in connection with this Agreement, which are
described in Section 7.1. below, Valley [*] that Encoding will receive revenues
from the Sampling Service of at least [*] during each three month period (an
"Installment Period") during the first twelve (12) months after the Sampling
-------------------
Service becomes operational (the "Guaranteed Period") for a total guaranteed
-----------------
payment of at least [*]. If Encoding does not receive revenues from the Sampling
Service of at least [*] during each Installment Period during the Guaranteed
Period, Valley will make a payment to Encoding (each, a "Guaranteed Payment")
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within thirty (30) Days of the conclusion of applicable Installment Period equal
to the difference between [*] and the amount of revenues actually received by
Encoding from the Sampling Service during the applicable Installment Period (the
"Sampling Service Revenue"); provided, however, that Encoding will not be
entitled to receive the Guaranteed Payment if (a) the Sampling Service is not
operational on or before [*] if Valley has provided the Priority CDs (as defined
below) within 30 days of the Effective Date, or [*], which is incorporated
herein by this reference; provided, further, that Valley shall not be obligated
to make a Guaranteed Payment for a particular Installment Period if Encoding has
received an average of [*] from Guaranteed Payments and Sampling Service Revenue
and all Guaranteed Payments for the Installment Period in question and each
preceding Installment Period. For purposes of this Section 6, the Sampling
Service will become "operational" when Encoding has created Song Files and Song
Clips for the [*] Loaned CDs designated as "Priority CDs" within 30 days of the
Effective Date. For the purposes of this Section 6, all references to "revenue"
shall be revenue calculated in accordance with U.S. GAAP.
7. Service Fees.
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7.1. Capital Expenses. Encoding will pay all the necessary upfront capital
----------------
equipment charges necessary for the creation of the Sampling Service which
are estimated to total [*] and to include:
7.1.1. Facilities
7.1.2. Ripping Stations
7.1.3. Encoding Stations
7.1.4. Raid Online Storage
7.1.5. Nearline Storage System
7.1.6. Computer servers and Equipment
7.2. Shared Costs. In consideration of the services performed by Encoding
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under this Agreement, Encoding and Valley will [*] the costs of creating the
Song Files and Song Clips. The costs will include [*]. Encoding estimates
these direct costs to total [*]. Therefore, Valley will pay Encoding a total
of [*] on [*] for the non-refundable expenses for setting up the Sampling
Service. The above estimates are fixed and in the event the actual costs for
this service increase or decrease, Valley will [*].
7.3. Maintenance Costs. For the ongoing maintenance encoding of new inventory
-----------------
for the Sampling Service, Valley and Encoding will [*] the actual direct
ongoing encoding costs estimated at the rate of [*] per CD used in the
Sampling Service. Therefore, Valley would pay Encoding a service fee of [*]
per such CD. These costs are fixed through September 2000. In the event, the
costs for maintenance are determined to increase or decrease by [*] or
higher, the parties agree to renegotiate this clause and its fee schedule in
good faith. Encoding will invoice Valley on a monthly basis that reflects the
actual number of files added to the
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Sampling Service inventory. Valley and Encoding will each pay [*] of all
shipping and handling charges to and from the Valley and Xxxxxxxx.xxx
facilities.
7.4. Streaming Costs. Encoding will charge Valley [*] for the ongoing
---------------
streaming and hosting costs. [*] is defined as the [*] plus [*] of the [*]
plus [*].
8. Ownership and Rights upon Termination.
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8.1. Loaned CDs.
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8.1.1. The Loaned CDs are, and will at all times remain, Valley's sole and
exclusive property, and Valley will have the right to demand the return
of any or all of the Loaned CDs, with Encoding and Valley to each pay [*]
of the cost of such return, including the original artwork and packaging
for each Loaned CD, at any time; provided, however, that, if at any time
any or all of the Loaned CDs (other than any Loaned CDs purchased by
Encoding pursuant to Section 9.2 of this Agreement) are determined to be
Encoding's property, Encoding hereby grants Valley a security interest in
such Loaned CDs.
8.1.2. Upon the expiration or termination of this Agreement, Encoding will
promptly return all of the Loaned CDs, including the original artwork and
packaging for each Loaned CD, with Encoding and Valley to each pay [*] of
the cost of such return, to Valley (other than any Loaned CDs Encoding
has already returned to, or purchased from, Valley pursuant to Section
9.2 of this Agreement).
8.2. Files and Clips.
---------------
8.2.1. The Song Clips, the Song Files and the Cover Art Files will be, and
will at all times remain, the sole and exclusive property of Valley;
provided, however, that, if at any time any or all of the Song Files
and/or the Song Clips and/or the Cover Art Files are determined to be
Encoding's property, Encoding hereby grants Valley a security interest in
such Song Files and/or Song Clips and/or Cover Art Files .
8.2.2. The Product Information File and any and all PIF Updates will be, and
will at all times remain, the sole and exclusive property of Valley;
provided, however, that, if at any time the Product Information File, any
portion thereof, or any or all of the PIF Updates are determined to be
Encoding's property, Encoding hereby grants Valley a security interest in
the Product Information File and/or such PIF Updates.
8.2.3. Valley hereby grants Encoding a worldwide, perpetual, irrevocable,
nonexclusive license to use, store, modify, copy and distribute the
Product Information File, the PIF Updates, the Song Clips, the Song Files
and the cover Art Files. This license will survive any termination or
expiration of this Agreement. Encoding will have the right to sublicense
the Product Information File, the PIF Updates, the Song Files, the Song
Clips and the Cover Art Files to any entity other than [*].
8.2.4. Upon the expiration or termination of this Agreement, or at any
earlier time, upon demand by Valley, Encoding will promptly deliver to
Valley, [*], copies of all of the Song Files, Song Clips and Cover Art
Files in the formats maintained hereunder; provided, however, if Valley
terminates this Agreement as a result of a breach of this Agreement by
Encoding pursuant to Section 18.2, Encoding shall [*].
8.3. Consumer Data. All of the Consumer Data will be, and will at all times
-------------
remain, the sole and exclusive property of Valley; provided, however, that
Valley will pay Encoding [*] all revenues received by Valley through the
sale, licensing or other commercial exploitation of all or any portion of the
Consumer Data during the term of this Agreement.
9. Audiofile License and Deleted Product.
--------------------------------------
9.1. At the same time the parties enter into this Agreement, they will enter
into an Audiofile License Agreement substantially in the form attached hereto
as Exhibit F (the "Audiofile License"), which is incorporated herein by this
--------- -----------------
reference, pursuant to which Valley will license its audiofile database
("Audiofile") to Encoding on a royalty free basis during the term of this
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Agreement. If Valley is notified by any of its suppliers that the supplier is
deleting one of the Loaned CDs from its catalog, Valley will post a deletion
notice regarding the Loaned CD on Audiofile, and Encoding will return its
copy of the Loaned CD to Valley on or before the Last
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Customer Return Date stated in the deletion notice, with Encoding and
Valley to [*] of the cost of such return.
9.2. If Valley posts a deletion notice regarding a Loaned CD on Audiofile and
Audiofile is fully operational and accessible by Encoding, and Encoding fails
to return its copy of the Loaned CD to Valley prior to the Last Customer
Return Date stated in the deletion notice, Encoding will purchase the Loaned
CD from Valley at Valley's wholesale price for the Loaned CD.
10. Initial Warrant Grant. Encoding will issue warrants for [*] shares of
Encoding common stock with a strike price of [*] per share and an exercise
period of [*] (the "Initial Warrants"). The Initial Warrants will be granted
upon commencement of this agreement.
11. Rights Acquisition. Encoding will grant Valley an additional [*] on the
same terms and conditions as the Initial Warrants in consideration of Valley's
certification attached hereto as Exhibit G (the "Certificate"), which is
--------- -----------
incorporated herein by this reference, regarding Valley's attempts to [*]. The
statements contained in the Certificate will constitute representations and
warranties of Valley under this Agreement. If Valley enters into a definitive
written agreement with [*] regarding the matters set forth in the Certificate,
Valley will provide a copy of such agreement to Encoding.
12. Future Endeavors.
----------------
12.1. Valley and Encoding will explore the possibility of a variety of new
offerings leveraging either the existing assets such as the Song Files, Song
Clips and/or the PIF for additional Internet Music services including digital
downloading services for Valley's customers, Internet radio broadcasts,
Internet or digital juke boxes, "just-in-time" compact disc manufacturing; or
offerings leveraging other assets of Valley and Encoding.
12.2. Valley and Encoding agree that both parties will mutually agree upon the
appropriate business model for all new jointly created new ventures. In such
ventures as may occur, Encoding and Valley will [*] but will attempt to
structure the ventures so [*].
13. Representations and Warranties of Encoding. To induce Valley to enter into
------------------------------------------
this Agreement and to perform the transactions contemplated hereunder, Encoding
represents and warrants as follows:
13.1. Organization. Encoding is a corporation duly organized, validly
------------
existing and in good standing under the laws of the state of Delaware.
13.2. Authority; Consents and Approvals; No Violations. Encoding has the full
------------------------------------------------
corporate power and authority and legal right to execute and deliver this
Agreement, and otherwise to perform its obligations hereunder. This Agreement
has been validly executed and delivered by Encoding and will constitute a
valid and binding obligation of Encoding enforceable in accordance with its
terms, except to the extent such enforceability may be limited by the effects
of bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally, and by the effect of general
principles of equitable law, regardless of whether such enforceability is
considered in a proceeding in equity or at law. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby
do not and will not violate any provision of Encoding's Certificate of
Incorporation or Bylaws, or violate, conflict with, result in a breach of or
constitute (with or without due notice, lapse of time or both) a default
under any agreement, license, contract, franchise, permit, indenture, lease,
or other instrument to which Encoding is a party, or by which it or any of
its assets are bound.
13.3. Performance Standards. Encoding will perform the services described in
---------------------
Sections 4 and 5 of this Agreement in a professional and workmanlike manner
that is consistent with the highest industry standards.
14. Representations and Warranties of Valley. To induce Encoding to enter into
----------------------------------------
this Agreement and to perform the transactions contemplated hereunder, Valley
represents and warrants as follows:
14.1. Organization. Valley is a corporation duly organized, validly existing
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and in good standing under the laws of the state of Delaware.
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14.2. Authority; Consents and Approvals; No Violations. Valley has the full
------------------------------------------------
corporate power and authority and legal right to execute and deliver this
Agreement, and otherwise to perform its obligations hereunder. This Agreement
has been validly executed and delivered by Valley and will constitute a valid
and binding obligation of Valley enforceable in accordance with its terms,
except to the extent such enforceability may be limited by the effects of
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally, and by the effect of general
principles of equitable law, regardless of whether such enforceability is
considered in a proceeding in equity or at law. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby
do not and will not violate any provision of Valley's Certificate of
Incorporation or Bylaws or violate, conflict with, result in a breach of or
constitute (with or without due notice, lapse of time or both) a default
under any agreement, license, contract, franchise, permit, indenture, lease,
or other instrument to which Valley is a party, or by which it or any of its
assets are bound.
15. Indemnification. Each party will, at all times, indemnify, defend and hold
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the other party harmless from and against any and all third-party claims,
damages, liabilities, costs and expenses (including reasonable attorney's fees)
arising out of any breach or alleged breach by the indemnifying party of any
representation, warranty or obligation of such party under this Agreement. In
addition, each party will, at all times, indemnify, defend and hold the other
party harmless from and against any and all third-party claims, damages,
liabilities, costs and expenses (including reasonable attorney's fees) arising
out of any infringement or alleged infringement of the patents, copyrights,
trademarks or other intellectual property rights of any third party that results
from the commercial use of the Sampling Service by the indemnifying party, any
of the indemnifying party's licensees, or any person or entity that has
purchased the Sampling Service, or any portion thereof, from the indemnifying
party.
16. Limitation on Damages. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE
---------------------
OTHER FOR INDIRECT OR CONSEQUENTIAL DAMAGES, WHETHER OR NOT SUCH PARTY HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES AND REGARDLESS OF THE FORM OF ACTION.
17. Confidential Information. Neither Encoding nor Valley may use any
------------------------
Confidential Information of the other except as permitted under this Agreement.
In addition, neither Encoding nor Valley may disclose any Confidential
Information of the other unless (a) such disclosure is made to the Disclosing
Party's employees or agents on a "need to know" basis or (b) such disclosure is
required by law or legal process and the party from whom such disclosure is
required has given the other party prior notice of such requirement and has
cooperated with the non-Disclosing Party to oppose disclosure. For purposes of
this Agreement, any unauthorized use or disclosure of Confidential Information
by an employee or agent of either party will be treated as an unauthorized
disclosure by such party.
18. Term and Termination.
--------------------
18.1. This Agreement will terminate on the [*]of the Effective Date (the
"Initial Termination Date"), unless both parties provide a written amendment
at least ninety (90) days prior to the Initial Termination Date, in which
case this Agreement will be extended for an additional [*] years and will
terminate upon the [*] anniversary of the Effective Date.
18.2. Either party may terminate this Agreement if (i) the other party
materially breaches any of its obligations under this Agreement, (ii) the
non-breaching party sends written notice to the breaching party describing
the breach in reasonable detail, and (iii) the breaching party does not cure
the breach within thirty (30) days following its receipt of such notice.
18.3. Either party may terminate this Agreement if (i) the other party becomes
insolvent, or (ii) a petition is filed by or against the other party under
any bankruptcy or insolvency laws and, in the event of any involuntary
petition, the petition is not dismissed within forty-five (45) days of the
filing date.
18.4. The parties may terminate this Agreement by mutual consent through a
signed writing.
19. Press Release. Upon execution of this Agreement, Encoding and Valley will
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issue a joint press release (the "Press Release") announcing the execution of
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this Agreement and briefly describing the transactions contemplated hereby.
Neither party will issue the Press Release, nor any other release concerning
this Agreement or the transactions contemplated hereby, without the other
party's prior consent.
20. Miscellaneous
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20.1. Assignment. Neither party may assign any of its rights under this
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Agreement without the other party's prior written consent; provided, however,
that either party may assign its rights under this Agreement to any affiliate
of such party, any entity into which such party is merged or any entity that
purchases substantially all of the assets of such party.
20.2. Further Assurances. In addition to the obligations required to be
------------------
performed by the parties hereto under the other provisions of this Agreement,
the parties agree to perform, without further consideration, such other acts
and to execute, file, acknowledge and deliver such other instruments and
documents, including without limitation UCC-1 financing statements covering
the Loaned CDs, the Song Files, the Song Clips, the Product Information File
and the PIF Updates, as may be reasonably required to carry out the
provisions and purposes of this Agreement and to fully and properly
consummate the transactions contemplated hereby.
20.3. Amendment and Waiver. No amendment or modification of this Agreement
--------------------
will be effective unless set forth in a writing signed by an authorized
representative of the party against which enforcement of such amendment is
sought. No waiver by a party of the other party's obligation to comply with
any provision of this Agreement will be deemed or will constitute a waiver of
the nonwaiving party's obligation to comply with any other provision of this
Agreement or with the nonwaiving party's obligation to comply with the waived
provision on a subsequent occasion.
20.4. Arbitration. Any dispute or controversy arising between Encoding and
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Valley regarding this Agreement will be submitted to arbitration in the state
of the defending party in accordance with the rules then in effect of the
American Arbitration Association. Any award made by an arbitrator pursuant
to this Section 20.4 will be binding upon both parties in the absence of
fraud and may be entered in any court of competent jurisdiction.
20.5. Notices. Any notice to a party pursuant to this Agreement shall be given
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by one of the following means: (a) certified or registered United States
mail, postage prepaid, (b) private courier or express service requesting
evidence of receipt as a part of its service, or (c) by telecopy, with a copy
also to be given by first class United States mail, postage prepaid, or by
any means permitted under parts (a) or (b) of this Section 20.5. Notices
shall be given to the parties at the following addressees:
If to Valley: Valley Media, Inc.
0000 Xxxxx Xxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx Xxxxxxx
Fax Number: (000) 000-0000
If to Encoding: xxxxxxxx.xxx, Inc.
000 Xxxxx Xxx, 0xx Xxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: CFO
Fax Number: 000-000-0000
with a mandatory copy to: Venture Law Group
0000 Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxxxx
Fax Number: (000) 000-0000
20.6. Binding Effect. Upon execution of this Agreement by all parties hereto,
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this Agreement shall inure to the benefit of, and be binding on and
enforceable against, the parties and their respective heirs, legal
representatives, successors and permitted assigns.
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20.7. Entire Agreement. This Agreement, including the exhibits and schedules
----------------
hereto, together with the Audiofile License and the Warrant, constitute the
entire agreement and understanding between the parties with respect to the
subject matter hereof, and supersede any prior or contemporaneous agreements
or understandings relating to the subject matter hereof, whether written or
oral.
20.8. Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original and all of which,
taken together, will constitute one and the same instrument.
20.9. Attorneys' Fees. If any arbitration, legal action or other proceeding is
---------------
brought for the enforcement of this Agreement, or because of an alleged
dispute, breach, default or misrepresentation in connection with any of the
provisions of this Agreement, the successful or prevailing party will be
entitled to recover reasonable attorneys' fees and other costs incurred in
such action or proceeding, in addition to any other relief to which it may be
entitled.
20.10. Survival. The provisions of Sections 1, 8.3, 15, 16, 17, and 20 will
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survive any termination or expiration of this Agreement.
20.11. Headings. The headings of the paragraphs and sections of this Agreement
--------
are included for purposes of convenience only and shall not affect the
construction or interpretation of any provisions hereunder.
20.12. Partial Invalidity. The invalidity of any part or provision of this
------------------
Agreement will not affect the enforceability of the remainder of this
Agreement.
20.13. Governing Law. This Agreement will be governed by and construed in
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accordance with the substantive laws of the State of California applicable to
contracts entered into and performed entirely within that state.
In witness whereof, the parties have executed this Services Agreement as of the
Effective Date.
Valley Media, Inc. xxxxxxxx.xxx, Inc.
/s/ Xxxxxx Xxxxxxx /s/ Xxxxx X. Xxxxxx
----------------------- --------------------------
By: Xxxxxx Xxxxxxx By: Xxxxx X. Xxxxxx
Its: General Counsel Its: President/Chief Operating Officer
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