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REDACTED EXHIBIT 10.3
BMI WEB SITE
MUSIC PERFORMANCE AGREEMENT
xxxx://xxx.xxx.xxx
AGREEMENT, made on October 9, 1998, by and between BROADCAST MUSIC, INC.
("BMI"), a New York corporation with its principal offices at 000 Xxxx 00xx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 and ARTISTDIRECT ("LICENSEE") a California
(State)
(check one) [ ] corporation
[ ] partnership
[ ] limited liability company
[ ] individual d/b/a ___________________________ (complete if
applicable) with its principal offices at 00000 Xxxxxxx Xxxx., Xxxxx 000,
Xxxxxx, XX 00000.
IT IS HEREBY AGREED AS FOLLOWS:
1. Definitions.
As used in this Agreement, the following terms shall have the following
respective meanings:
(a) The "Term" of this Agreement shall mean the period from
October 9, 1998 through June 30, 2000 and continuing on a year-to-year basis
thereafter; provided, however, that either party may terminate the Agreement
upon 60 days' prior written notice at the end of June of any year beginning with
June 30, 2000.
(b) "Web Site" shall mean an Internet computer service currently
registered with Internic and known as ULTIMATE BAND LIST that LICENSEE produces
and/or packages and then transmits or causes to be transmitted either directly
or indirectly to persons who receive the service from the URL xxxx://XXX.XXX
over the Internet by means of a personal computer or by means of another device
capable of receiving Internet transmissions. LICENSEE agrees that this Agreement
covers only transmissions originating from this Web Site and URL within the
Territory. LICENSEE may list additional Web Sites owned, operated and/or
controlled by LICENSEE on Exhibit A hereto. LICENSEE must comply separately with
all reporting requirements under this Agreement for each Web Site listed on
Exhibit A. References herein to Web Site shall include those additional sites
listed on Exhibit A.
(c) "Territory" shall mean the United States, its territories,
commonwealths and possessions.
(d) "Online Service" shall mean a commercial computer online
information and/or entertainment programming packaging service (including, but
not limited to, America Online, Microsoft Network, CompuServe and Prodigy) which
may offer consumers, for a fee, access to proprietary centralized databases as
well as remote sources of audio and video programming and which may provide
Internet access.
(e) "Web page" shall mean a set of associated files transferred
sequentially to and rendered more or less simultaneously by a browser.
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(f) "Page impression" shall mean a transfer request for a single
web page.
(g) "Music page" shall mean a web page which presents an icon
that may be clicked on to access music or at which music is played upon loading
the web page.
(h) "Music impression" shall mean a page impression of a music
page multiplied by the number of music file titles on that page either visible
by means of an icon on that page or otherwise (e.g., a music page with five (5)
music file titles would yield 5 music impressions whenever that page is
requested).
(i) "Gross Revenues" shall mean [***].
(j) "Music Area Revenues" shall mean Gross Revenues multiplied
by a fraction the numerator of which is the total number of music impressions
for the Web Site and the denominator or which is the total number of page
impressions for the Web Site.
2. Grant of Rights.
(a) BMI hereby grants to LICENSEE, for the Term of this
Agreement, a non-exclusive license to perform publicly within the Territory, in
and as part of LICENSEE's Web Site transmitted or caused to be transmitted
either directly or indirectly by LICENSEE over the Internet all musical works,
the rights to grant public performance licenses of which BMI controls. This
license shall include only public performances by transmissions originating from
a server within the Territory and received by listeners via personal computers
or by means of another device capable of receiving the Internet through
streaming technologies as well as those transmissions that are downloaded by
persons on personal computers or otherwise. This license shall not include
dramatic rights or the right to perform dramatico-musical works in whole or in
substantial part. In no event shall this license include transmissions to any
commercial premises where LICENSEE's Web Site is used as a commercial music
service (as that term is currently understood in the industry) or is performed
publicly; such performances of BMI music shall be subject to appropriate
separate BMI license(s).
(b) Nothing herein shall be construed as the grant by BMI of any
license in connection with any transmission which is not party of LICENSEE's Web
Site transmitted or caused to be transmitted by LICENSEE and nothing herein
shall be construed as authorizing LICENSEE to grant to others (including, but
not limited to, online services, cable television system operators and open
video systems (acting as other than Internet service providers)) any license or
right to reproduce or perform publicly by any means, method or process
whatsoever, any of the musical compositions licensed hereunder.
(c) The transmission by LICENSEE of a public performance
licensed hereunder may originate at any place within the Territory whether or
not such place is licensed by BMI.
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(d) This Agreement grants only public performing rights to
LICENSEE, and does not grant any reproduction, distribution, performance right
in sound recordings or any other intellectual property right(s) in any musical
compositions to any person or entity that may receive and/or download or
otherwise store the transmission of musical works.
(e) This Agreement only grants to LICENSEE the right to publicly
perform musical works in which and to the extent BMI has been granted the public
performing rights.
(f) LICENSEE represents and warrants that it shall not offer
LICENSEE's Web Site for resale by a third party as a pay or premium audio
service, and that LICENSEE's Web Site shall not be packaged or included on a
tier of services for additional revenues either independently or with other Web
Sites by third parties. The license granted hereunder shall not extend to any
such use of the Web Site.
3. License Fee.
In consideration of the license granted herein, LICENSEE shall pay to
BMI for each quarter year of the Term a license fee equal to either of the
following amounts the choice between which shall be LICENSEE's:
(a) Gross Revenues Calculation. LICENSEE shall pay to BMI [***]
of LICENSEE's Gross Revenues generated by LICENSEE's Web Site during each
quarter year of the Term according to the Payment Schedule set forth below
("Payment Schedule"); or
(b) Music Area Revenues Calculation. LICENSEE shall pay to BMI
the [***].
[***]:
Quarter Period Ending* Payment Due Date*
------- -------------- -----------------
[***] [***] [***]
[***] [***] [***]
[***] [***] [***]
[***] [***] [***]
4. Minimum Fee
Upon signing this Agreement, LICENSEE shall pay to BMI an [***].
Thereafter, LICENSEE shall pay the [***] the beginning of each calendar year by
no later than January 31. The minimum fee payment will be credited against any
additional fees LICENSEE shall owe to BMI above the minimum fee in the same year
to which the minimum fee shall apply. Web Sites paying only the minimum fee must
still furnish financial reports under Paragraph 5 per the schedule set forth
above.
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5. Financial Reports and Audit.
(a) LICENSEE shall submit to BMI separate reports as to all
Gross Revenues generated by LICENSEE's Web Site as follows:
(i) For each quarter year to which this Agreement
applies, a quarterly report, certified by an authorized representative of
LICENSEE, for the Web Site, in the form substantially the same as the Web Site
Music Performance License Quarterly Report Form annexed to this Agreement as
Exhibit B, due at the same time as the applicable quarterly license fee on or
before the thirtieth (30th) day after the end of the quarter year in accordance
with the Payment Schedule set forth above in Paragraph 3. LICENSEE agrees to use
software which BMI may provide to LICENSEE to prepare and deliver such reports
electronically.
(ii) In the absence of timely filed quarterly reports as
set forth above, BMI shall have the right to estimate the fees due for a given
quarter year on the basis of the highest quarterly fee during the previous
twelve (12) months and xxxx LICENSEE therefor. However, neither BMI's estimation
of the fee for a reporting period nor anything else shall relieve LICENSEE of
the obligation to report and make appropriate actual fee payment for the
reporting period. If said quarterly estimate in the absence of a timely
completed report reflects that LICENSEE's total estimated license fee for said
quarter year was less than the estimated fee paid, BMI shall credit the
overpayment to LICENSEE's account. If LICENSEE has submitted all contractually
required prior reports and payments to BMI and this Agreement is no longer in
effect, BMI shall refund the overpayment to LICENSEE.
(b) BMI shall have the right to require that LICENSEE provide
BMI with data or information as may be necessary to ascertain the license fee
due hereunder.
(c) BMI shall have the right, once with respect to each year of
the Term (or portion thereof), by its duly authorized representatives, at any
time during customary business hours and upon thirty (30) days' advance written
notice, to examine the books and records of account of LICENSEE necessary to
verify any and all statements, accounting and reports rendered and/or required
by this Agreement and in order to ascertain the license fee due BMI for any
unreported period. BMI shall treat as confidential all data and information
coming to its attention as the result of any such examination of books and
records.
(d) In the event that BMI conducts an audit under Paragraph 5(c)
and such audit reveals that LICENSEE has underpaid license fees to BMI, LICENSEE
shall immediately pay the amount LICENSEE owes BMI and, in addition, if such
underpayment amounts to [***] or more of LICENSEES annual fees for the audited
period LICENSEE shall pay BMI a late payment charge in the amount of [***] of
all monies owed commencing on the actual date such monies were due.
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6. Late Payment Charge.
BMI may impose a late payment charge of [***] from the date payment was
due on any payment that is received by BMI more than [***] after the due date.
7. Music Use Reports.
Upon BMI's request, LICENSEE shall provide BMI with separate detailed
information in electronic form from LICENSEE's log, and statistics about the
transmission of all musical works on LICENSEE's Web Site. Such information shall
identify the musical works by title, composer/writer, author, artist, record
label, length, type of use (i.e., theme, background or feature performance) and
manner of performance (i.e. instrumental or vocal) (or any other methodology
agreed to by BMI and LICENSEE) and specify the number of times each musical work
is transmitted and whether such transmission is streamed or downloaded. LICENSEE
shall request reports from its licensors or outside producers with respect to
all content provided by others and transmitted by LICENSEE as part of LICENSEE's
Web Site. LICENSEE shall deliver to BMI all reports with respect to such data
covering programs transmitted by LICENSEE during each calendar quarter year on
or before the thirtieth day following the end of such quarter pursuant to the
schedule set forth in Paragraph 3 herein. LICENSEE agrees to use software which
BMI may provide to LICENSEE to prepare and deliver such reports electronically.
8. Indemnification.
BMI shall indemnify, save and hold harmless and defend LICENSEE and its
officers and employees from and against any and all claims, demands and suits
that may be made or brought against them or any of them with respect to the
public performance within the Territory of any Works, licensed under this
Agreement; provided, however, that such indemnity shall be limited to those
claims, demands or suits that are made or brought within the Territory, and
provided further that such indemnity shall be limited to works which are BMI
affiliated works at the time of LICENSEE's performance of such works. This
indemnity shall not apply to transmissions of any musical work performed by
LICENSEE after written request from BMI to LICENSEE that LICENSEE refrain from
performance thereof. BMI shall, upon reasonable written request, advise LICENSEE
whether particular musical works are available for performance as part of BMI's
repertoire. LICENSEE shall provide the title and the writer/composer of each
musical composition requested to be identified. LICENSEE agrees to give BMI
immediate notice of any such claim, demand, or suit, to deliver to BMI any
papers pertaining thereto, and to cooperate with BMI with respect thereto, and
BMI shall have full charge of the defense of such claim, demand, or suit;
provided, however, that LICENSEE may retain counsel on its behalf and at its own
expense and participate in the defense of such claim, demand or suit.
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9. Warranty: Reservation of Rights.
(a) LICENSEE shall use its best efforts to ensure that its
transmissions of musical works by means of LICENSEE's Web Site are digitally
encoded to prevent the recipient of the transmission from digitally copying or
transmitting the works to others.
(b) This Agreement is experimental in nature and both parties
reserve the right to reevaluate the appropriateness of the fees and terms herein
for periods following the expiration of the Term.
10. Breach or Default.
Upon any breach or default of the terms and conditions of this Agreement
by LICENSEE, BMI shall have the right to cancel this Agreement, but any such
cancellation shall only become effective if such breach or default continues
thirty (30) days after LICENSEE's receipt of written notice thereof. The right
to cancel shall be in addition to any and all other remedies which BMI may have.
No waiver by BMI of full performance of this Agreement by LICENSEE in any one or
more instances shall be a waiver of the right to require full and complete
performance of this Agreement thereafter or of the right to cancel this
Agreement in accordance with the terms of this Paragraph.
11. Arbitration.
All disputes of any kind, nature or description arising in connection
with the terms and conditions of this Agreement (except for matters within the
jurisdiction of the BMI rate court) shall be submitted to arbitration in the
City, County, and State of New York under the then prevailing rules of the
American Arbitration Association by an arbitrator or arbitrators to be selected
as follows: Each of the parties shall, by written notice to the other, have the
right to appoint one arbitrator. If, within ten (10) days following the giving
of such notice by one party the other shall not, by written notice, appoint
another arbitrator, the first arbitrator shall be the sole arbitrator. If two
arbitrators are so appointed, they shall appoint a third arbitrator. If ten (10)
days elapse after the appointment of the second arbitrator and the two
arbitrators are unable to agree upon the third arbitrator, then either party
may, in writing, request the American Arbitration Association to appoint the
third arbitrator. The award made in the arbitration shall be binding and
conclusive on the parties and judgment may be, but need not be, entered in any
court having jurisdiction. Such award shall include the fixing of costs,
expenses, and attorneys' fees of arbitration, which shall be borne by the
unsuccessful party.
12. Withdrawal of Works.
BMI reserves the right at its discretion to withdraw from the license
granted hereunder any musical work as to which legal action has been instituted
or a claim made that BMI does not have the right to license the performing
rights in such work or that such work infringes another composition.
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13. Notice.
All notices and other communications between the parties hereto shall be
in writing and deemed received (i) when delivered in person; (ii) upon confirmed
transmission by telex or facsimile device; or (iii) five (5) days after
deposited in the United States mails, postage prepaid, certified or registered
mail, addressed to the other party at the address set forth below (or at such
other address as such other party may supply by written notice):
BMI 000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx Xxxxxx
Senior Vice President Licensing
with a separate copy to:
Xxxxxx X. Xxxxxxxx Esq.
Senior Vice President and General Counsel
LICENSEE: 00000 Xxxxxxx Xxxx., #000
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Xxxxxx, XX 00000
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Attn
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with a separate copy to:
Xxxxxx Xxxxxxxx
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Content Editor
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14. Assignment.
This Agreement shall inure to the benefit of and shall be binding upon
the parties hereto and their respective successors and assigns, but no
assignment shall relieve the parties hereto of their respective obligations
hereunder.
15. Entire Agreement.
This Agreement constitutes the entire understanding between the parties
with respect to the subject matter hereof. This Agreement cannot be waived,
added to or modified orally and no waiver, addition or modification shall be
valid unless in writing and signed by the parties. This Agreement, its validity,
construction, and effect, shall be governed by the laws of the State of New
York. The fact that any provisions herein are found by a court of competent
jurisdiction to
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be void or unenforceable shall not affect the validity or enforceability of any
other provisions.
BROADCAST MUSIC, INC. Ultimate Band List
------------------------------------
(Licensee)
By: /s/ Xxxxxxx Xxxxxx
---------------------------------
(Signature) By: /s/ Xxxxx Xxxxxx
------------------------------------
(Signature)
Xxxxxxx Xxxxxx
------------------------------------
(Print Name of Signer) Xxxxx Xxxxxx
------------------------------------
(Print Name of Signer)
Vice President
Marketing & Business Development President
Media Licensing ------------------------------------
------------------------------------ (Title of Signer)
(Title of Signer)
PLEASE COMPLETE SHADED AREA ONLY
Please return signed agreement together with minimum fee to:
BMI
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
ATTN: Web Site Licensing
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EXHIBIT B
--------------------------------------------------------------------------------
BMI WEB SITE MUSIC PERFORMANCE AGREEMENT
Music Area Revenues Calculation
QUARTERLY REPORT FORM
--------------------------------------------------------------------------------
January 1- April 1- July 1- October 1-
March 31 June 30 September 30 December 31
Report for Calendar Quarter: [ ] [ ] [ ] [X] 1998
Company Name: ARTISTDIRECT
-----------------------------
Address: 00000 Xxxxxxx Xxxx.
-----------------------------
Xxxxxx, XX 00000
-----------------------------
Phone #: 818-748-8700
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Name of Web Site: ULTIMATE BAND LIST
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URL: xxxx://xxx.xxx
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Your Gross Revenues
1. Subscriber Revenue (including commissions on third party transactions) [***]
2. Advertising Revenue (less agency commissions) [***]
3. Provision of Space or Time [***]
4. Donations [***]
5. Trade or Barter [***]
6. Proprietary Software [***]
TOTAL GROSS REVENUES (add lines 1 through 6) [***]
[***] x ( [***] ) + ( [***] ) = [***]
-------------------- ---------------------------- --------------------------- -------------------
Total Gross Revenues Total # of Music Impressions Total # of Page Impressions Music Area Revenues
LICENSEE'S TOTAL PAYMENT DUE SHALL BE THE [***].
(a) [***] X [***] = [***]
------------------- --------------
Music Area Revenues Music Area Fee
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(b) [***] x [***] = [***]
-------------- --------------
Gross Revenues
TOTAL PAYMENT DUE = [***]
I hereby certify on this 9th day of October, 1998 that the above is true and
correct.
BY: /s/ Xxxxx Xxxxxx Please return report and payment to:
-------------------------------
(Signature)
Xxxxx Xxxxxx
------------------------------- Web Licensing
(Print Name of Signer) BMI
000 Xxxx 00xx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
President
-------------------------------
(Title of Signer)
Please e-mail any questions to xxxxxxxxxxxx@xxx.xxx
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bracketed portion. The confidential redacted portion has been omitted
and filed separately with the Securities and Exchange Commission.
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