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EXHIBIT 10.55
LICENSE AGREEMENT
AGREEMENT, made at New York, N.Y. on August 7, 1995, between BROADCAST
MUSIC, INC. (hereinafter called BMI), a New York corporation with principal
offices at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, X.X. 00000 and DMX, Inc. as successor
in interest to International Cablecasting Technologies, Inc. a Delaware
corporation doing business as Digital Music Express (hereinafter called
LICENSEE), with principal offices at 00000 Xxxx Xxxxxxx Xxxxxxxxx, Xxxxx 0000,
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000-0000 (the "Agreement").
IT IS AGREED AS FOLLOWS:
1. As used in this Agreement, the following terms shall have the following
respective meanings:
(a) "Term" shall mean the period beginning October 1, 1994 and ending
September 30, 1999. "Year" shall mean calendar year.
(b) "Distribution System" shall mean any digital cable audio
distribution system; microwave multi-point distribution system; pay system
including pay cable, "over the air" pay (i.e. DBS), "basic" cable, "basic" DBS
or any other pay cable audio system. Distribution System shall not include the
Internet.
(c) "Programming Service" shall mean an audio music service produced,
packaged, distributed or supplied by LICENSEE currently known as "Digital Music
Express" or "DMX" delivered via
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one or more Distribution Systems that transmit such service.
(d) "LICENSEE's Carriers" shall mean each and every Distribution System
which, at the time of the transmission in question, transmits the Programming
Service(s) supplied by LICENSEE pursuant to a contractual relationship with
LICENSEE.
(e) "Territory" shall mean the United States, its territories,
commonwealths and possessions.
2. (a) BMI hereby grants to LICENSEE, for the Term of this Agreement, a
through to the non-commercial subscriber non-exclusive license to use and
perform in and as part of the Programming Service wherever distributed or
supplied by LICENSEE for transmission by LICENSEE and by LICENSEE's Carriers
within the Territory, all musical works, the rights to grant public performance
licenses of which BMI may during the Term hereof control. 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 transmission by
LICENSEE or by LICENSEE's Carriers to any commercial premises where LICENSEE's
Programming Service is used as a commercial music service (as that term is
currently understood in the industry). Such performances of BMI music shall be
subject to separate BMI licenses.
(b) This grant of rights does not include any public performance or
recording and/or distribution (i.e. mechanical) rights to the transmissions of
the Programming Service which are downloaded onto computers by LICENSEE's
Carriers, subscribers,
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listeners or any third party. In the event LICENSEE contemplates any such
distribution, LICENSEE shall notify BMI and the parties shall negotiate the
appropriate permissions and performing rights fees.
(c) This grant of rights includes the right, if authorized by LICENSEE
to use the Programming Service in direct connection with text channels,
provided, however, that the Programming Service shall be unaltered and unedited,
and that any of LICENSEE's Carriers so using the Programming Service shall be
limited to five channels on its system.
(d) Nothing herein shall be construed as the grant by BMI of any
license in connection with any transmission which is not part of a Programming
Service supplied by LICENSEE and distributed via a Distribution System by
LICENSEE or one of LICENSEE's Carriers; and, except as otherwise expressly
provided herein, nothing herein shall be construed as authorizing LICENSEE to
grant to others any right to reproduce or perform publicly by any means, method
or process whatsoever, any of the musical compositions licensed hereunder or as
authorizing any party other than LICENSEE or LICENSEE Carriers to publicly
perform the musical works licensed hereunder.
(e) The performances licensed hereunder may originate at any place,
whether or not such place is licensed to publicly perform the musical works
licensed hereunder.
3. (a) In consideration of the license granted herein, LICENSEE agrees to
pay to BMI annual license fees for the Term, as
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follows:
Percentage of Gross Revenues
received by LICENSEE for
Contract Year the Programming Service
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Oct. 1, 1994 - Sept. 30, 1995 Three and three-quarters
percent (3.75%)
Oct. 1, 1995 - Sept. 30, 1996 Three and three-quarters
percent (3.75%)
Oct. 1, 1996 - Sept. 30, 1997 Four percent (4%)
Oct. 1, 1997 - Sept. 30, 1998 Four percent (4%)
Oct. 1, 1998 - Sept. 30, 1999 Four percent (4%)
(b) For purposes of Paragraph 3(a) "gross revenues received by
LICENSEE" shall mean all monies derived from the operation of LICENSEE's
Programming Service and shall be comprised of the following: (1) monies received
by LICENSEE from LICENSEE's Carriers and directly from Subscribers for
LICENSEE's Programming Service; (2) LICENSEE's advertising revenues (as billed),
or other monies received from sponsors if any (less advertising agency
commissions not to exceed 15% actually incurred to a recognized advertising
agency not owned or controlled by LICENSEE); (3) monies received for the
provision of time on the Programming Service to any third party; (4) monies
received from sale of time to providers of paid programming such as
infomercials; (5) where merchandise or any thing or service of value is received
by LICENSEE in lieu of cash consideration for the use of LICENSEE's Programming
Service (i.e. "trade and barter" or "tradeouts"), the fair market value thereof
or LICENSEE's prevailing published rate, whichever is less; (6) monies or other
consideration received by LICENSEE from
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LICENSEE's Carriers (but not including monies received by LICENSEE's Carriers
from others and not accounted for by LICENSEE's Carriers to LICENSEE) for the
provision of hardware by anyone and used in connection with the Programming
Service; (7) monies or other consideration received for any references to or
inclusion of any product or service on the Programming Service; (8) bad debts
recovered regarding (l)-(7) above. Gross revenues shall include such payments
as set forth above to which LICENSEE is entitled but which are paid to a
parent, subsidiary, division, or affiliate of LICENSEE, in lieu of payment to
LICENSEE but not including payments to LICENSEE's Carriers for the Programming
Service. LICENSEE shall be allowed a deduction from Gross Revenues as defined
above for affiliate revenue returned during the reporting period and for bad
debts actually written off during reporting period and which are related to
xxxxxxxx previously reported to BMI.
(c) An estimated annual fee shall be payable in twelve (12) monthly
installments, in advance not later than the first day of each month. For the
first contract quarter, LICENSEE shall base its estimated fee on its gross
revenues from the prior quarter year of operation. For the subsequent quarters
of this Agreement, LICENSEE shall use as an estimated fee the prior quarter's
actual fee as reported and/or as audited. The monthly fee shall be one-third of
the quarterly fee.
4. After each calendar year hereof, LICENSEE shall submit to BMI on or
before April 30, (e.g. after Dec. 31, 1995, on or before April 30, 1996) a
certification by an officer of LICENSEE as to
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gross revenues received by LICENSEE as defined in Paragraph 3 (b) hereof for
said year. If said statement reflects that LICENSEE's total license fee for said
year has been underpaid, LICENSEE agrees to pay BMI, at the time the statement
is rendered, the difference between the fee due and the estimated fee actually
paid. If said statement reflects that the total fee for said year has been
overpaid, BMI agrees to credit the excess to the account of LICENSEE, and if
such excess shall occur in the last year of the Term hereof, BMI agrees to
return same promptly.
5. (a) BMI shall have the right to require such data or information as may
be necessary in order to ascertain the license fee hereunder from LICENSEE.
(b) BMI shall have the right by its 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 as necessary to
verify any and all statements rendered and accountings made hereunder. BMI may
only conduct such an examination once in each calendar year, and such an
examination shall be limited to the prior four year period's statements and
accountings. BMI shall consider all data and information coming to its attention
as the result of any such examination of books and records as confidential.
(c) In the event BMI conducts an audit and such audit reveals that
LICENSEE underpaid license fees to BMI to the extent of ten percent (10%) or
more, then LICENSEE shall pay a late payment charge on the additional license
fees due as a result of
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the audit(s) of one and one half percent (1 1/2%) per month, from the date(s)
the license fees should have been paid pursuant to this agreement.
6. BMI may impose a late payment charge of one and one half percent
(1 1/2%) per month from the date payment was due on any payment that is
received by BMI more than thirty (30) days after the due date.
7. (a) LICENSEE, as a matter of course, shall cause logs to be prepared
with respect to all programming produced by LICENSEE for distribution to
LICENSEE's Carriers and shall request logs from its licensors or outside
producers with respect to all programming produced by others and distributed by
LICENSEE as part of a Programming Service to its Carriers. Such logs shall list
the title, composer, author, artist, record label, length, type of use (i.e.,
theme and background or feature performance) and manner of performance (i.e.
instrumental or vocal) (or any other methodology agreed to by BMI and LICENSEE)
of all musical performances included in the Programming Service. LICENSEE shall
deliver to BMI all logs in its possession covering programs originally aired by
LICENSEE during each quarter on or before the thirtieth day following the end of
such quarter.
In addition, LICENSEE shall, at the time such logs are due, deliver to BMI
the following:
(1) program guides indicating the scheduled performances of each
program on each Programming Service channel distributed or supplied by LICENSEE
during such quarter to LICENSEE's Carriers, to
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the extent such program guides are prepared by or for LICENSEE,
(2) a list of all LICENSEE's Carriers (which list may be in the form of
additions to and deletions from the last such full list supplied to BMI) as of
the end of such quarter.
(b) In place of the logs required by Subparagraph (a) of this
Agreement, BMI may, if it so elects, at any time during the Term of this
Agreement, require that the logs be submitted to BMI electronically or in
computer readable form. In such case:
(1) BMI will provide LICENSEE sixty (60) days' written notice of its
election;
(2) BMI will provide either (a) appropriate specifications for computer use
and transmission or (b) computer software which will enable LICENSEE to enter
the data required by Subparagraph (a) on PC diskettes or magnetic tapes; and
(3) BMI will, at its option, either provide LICENSEE with PC diskettes free
of charge for the entry of the required data or credit LICENSEE for the cost of
the diskettes.
(4) If BMI exercises its election hereunder and LICENSEE does not report in
accordance with such requirements, LICENSEE shall pay to BMI a data entry charge
of $6.00 per page for each month that LICENSEE's reports are not made
electronically in computer readable form as provided herein.
(c) Notwithstanding anything to the contrary in this Paragraph, BMI and
LICENSEE will discuss and negotiate in good faith procedures for LICENSEE to
report its music use on a sampling basis.
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8. BMI shall indemnify, save harmless and defend LICENSEE, each of
LICENSEE's Carriers and their respective officers and employees from and against
any and all claims, demands or suits that may be made or brought against them or
any of them with respect to the performance of any material licensed under this
Agreement during the Term. Such indemnity shall be limited to works which are
licensed by BMI at the time of LICENSEE's performance. BMI will, upon reasonable
written request, advise LICENSEE whether particular musical works are available
for performance as part of BMI's repertory. LICENSEE shall provide the title and
the writer/composer of each musical composition requested to be identified.
LICENSEE agrees to give BMI prompt 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 any such
claim, demand or suit, it being understood such notice shall be in a timely
fashion and not impede in any way BMI's obligations under this Paragraph.
9. Upon any breach or default of the terms and conditions of this
Agreement, BMI shall have the right to cancel this Agreement, but any such
cancellation shall become effective only 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
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full and complete performance or this Agreement thereafter or of the right to
cancel this Agreement in accordance with the terms of this Paragraph.
10. All disputes of any kind, nature or description arising in connection
with the terms and conditions of this Agreement not cognizable by the court
under Article XIV of the BMI consent decree (but including, matters arising in
connection with Paragraph 10 hereof) 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 attorney's fees of arbitration.
11. In the event that BMI, at any time during the Term hereof, shall, for
the licensing of a music user of the same class
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and category as that of LICENSEE, issue a license granting rights on terms
similar to those in this Agreement on a more favorable basis, BMI shall,
retroactive to the time such other music user was accorded such more favorable
terms offer to LICENSEE an agreement with comparable terms. Notwithstanding
anything to the contrary herein, if BMI issues a voluntary license (not the
result of court proceedings or arbitration) for "basic" cable service or "basic"
DBS service on a more favorable basis, BMI shall offer such terms to LICENSEE
only as to LICENSEE'S comparable "basic" cable or "basic" DBS service.
12. 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.
13. All notices given hereunder shall be duly and properly given if mailed
by regular first-class U.S. mail to BMI's or LICENSEE's as the case may be,
address set forth above or any other address which the parties hereto may from
time to time designate in writing for such purpose.
14. This Agreement shall enure 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. This Agreement constitutes the entire understanding between the parties
with respect to the subject matter hereof
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This Agreement cannot be waived or 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 be void or
unenforceable shall not affect the validity or enforceability of any other
provisions.
BROADCAST MUSIC, INC. DMX
By: /s/ Xxxx X. Shaker By: /s/ XXXXXX X. XXXXXXX
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(Signature) (Signature)
/s/ Xxxx Xxxxxx Xxxxxx X. Xxxxxxx
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(Print Name of Signer) (Print Name of Signer)
S.V.P. Licensing Executive Vice President
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(Title of Signer) (Title of Signer)
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