EXHIBIT 10.8
AGREEMENT
This Agreement is made and entered into as of March 10, 2000, by and
between MTVN ONLINE, L.P., a Delaware limited partnership, with its principal
place of business located at 000 Xxxxxxxx, 00xx xxxxx, Xxx Xxxx, Xxx Xxxx 00000
("MTVi"), and BEATNIK, Inc., a California corporation, with its principal place
of business located at 0000 X. Xx Xxxxxx Xxxx, Xxx Xxxxx, XX 00000 ("Beatnik").
WHEREAS, MTVi and its Affiliates operate Internet Websites that offer
music, music-videos and other entertainment related content and advertising;
WHEREAS, Beatnik has developed software technology that enables visitors to
Internet Websites to hear audio content and to manipulate the content as
entertainment;
WHEREAS, the parties hereto desire to incorporate the Beatnik products and
Beatnik enabled audio content on MTVi and its Affiliate Websites;
WHEREAS, the parties desire to promote the Beatnik products on MTVi and its
Affiliate Websites;
NOW THEREFORE,
The parties hereto agree as follows:
1. Definitions.
(a) "Affiliate" means any entity that, directly or indirectly through
one or more intermediaries, controls, is controlled by, or is under common
control with, a party to this Agreement. Without limiting the foregoing, the
parties acknowledge that Viacom International, Inc. and MTV Networks are
Affiliates of MTVi.
(b) "Application" means any computer file and any rights therein owned or
licensed by Beatnik that can be rendered into audio on a User's computer in
conjunction with the Beatnik player, Remix Engine or MixMan Studio software
including without limitation GrooveGrams and "Remixes" and that are made
generally available by Beatnik to its customers.
(c) "Beatnik Content" means any computer file owned or licensed by
Beatnik including any in Beatnik's archives that can be rendered into audio
either by cooperating with a user's Internet browser as a plug-in module and/or
by the user using the Beatnik player software or the MixMan Studio software.
Beatnik Content shall include, without limitation, any "D-plate," any
Application, the 100 audio files contained within the Headspace Library usable
with the S-Track feature on the MTV Affiliate Sites and any sound components
contained within the Beatnik Licensing Portal.
(d) "Beatnik Technology" means the Beatnik GrooveGram Remix Engine API,
the QuickClip API, the Easysonifier API, the Beatnik Player, version 2.5, the
2
Beatnik Editor and the Beatnik Converter, in the form distributed by Beatnik
generally as of January 31, 2000, plus any new versions or upgrades of such
software made generally available by Beatnik to its customers during the term of
this Agreement.
(e) "Beatnik Website" means xxx.xxxxxxx.xxx or any other URL owned,
operated or controlled by Beatnik, including any mirror sites, caching servers
or equivalent devices.
(f) "Co-Branded" means the placement of one or more Beatnik brands in
close proximity to one or more MTVi brands on any given webpage, product, or
product packaging for the purposes of promotion or source designation of goods
and services in accordance with this Agreement.
(g) "Confidential Information" means all non-public information of a
party and its affiliates including, without limitation, information relating to
the party's technology, business strategy (either as then being conducted or
proposed to be conducted), know-how, marketing, suppliers, customers, sources of
materials, finances, accounting, business relationships, employees, and trade
secrets. The obligations set forth in Section 21 with respect to Confidential
Information shall not apply to (i) any information that enters the public domain
through no fault of a party bound hereby, (ii) any information that is made
available to a party from a source other than the other party, which information
is not subject to a confidentiality agreement, or (iii) any information that is
developed by a party independently, without use of or reference to the other
party's Confidential Information.
(h) "Effective Date" means the date of this Agreement.
(i) "GrooveGram" means the interactive remixes that Beatnik creates by
breaking a sound recording down into its musical components (such as guitar,
bass, drums and vocal tracks) or parts thereof and putting them into the Beatnik
RMF format on separate tracks that can be easily remixed using Beatnik's
proprietary Remix Engine in a musically cohesive way on any JavaScript-enabled
web browser.
(j) "Headspace Library" means the library of compositions which are
generally made available in the RMF formatted medium embodying masters for use
as musical accompaniment to enhance a featured audio, visual or audio-visual
performance made available by Beatnik.
(k) "Impression" means the appearance on any webpage hosted on any MTVi
Affiliate Site that is viewed by a User of either: (i) any hyperlink to any
Beatnik Application, any Co-Branded Page, any Beatnik related download or any
Website under the control of Beatnik or its Affiliates or (ii) any Beatnik or
Beatnik owned logo, trademark, or product designation. Notwithstanding the
foregoing, Impressions will not include any of the items listed in subsections
(i) or (ii) which are provided as part of the additional advertising or
sponsorships purchased by Beatnik pursuant to Section 4 of this Agreement. The
maximum number of Impressions counted for any single Webpage load shall be four
(4).
3
(l) "Licensing Portal" means the Beatnik website (xxxxxxx.xxx or its
successors) made generally available by Beatnik through which the public can
purchase licenses to music, sound effects and other sound components from
Beatnik's sound libraries to be used to incorporate sound effects into the
design of a website.
(m) "MTVi Affiliate Site(s)" means: (i) xxx.xxx.xxx; (ii) xxx.xx0.xxx;
(iii) xxx.xxxxxxxx.xxx; (iv) any other universal resource locator (URL) under
common ownership, control or operation with MTVi; and (v) a URL in which Viacom
owns a substantial equity interest and is branded and/or presented to users
solely as an "MTV" Website. MTVi Affiliate Sites shall also include mirror
sites, caching servers or equivalent devices whose distribution function for
purposes hereunder is determined solely by actions directed at the top level
domains listed in the foregoing clauses (i) through (v).
(n) "MTV Named Sites" means the following sites: (i) xxx.xxx.xxx,
xxx.xx0.xxx; and xxx.xxxxxxxx.xxx, and (ii) any other site mutually agreed upon
by the parties, including mirror sites, caching servers or equivalent devices
whose distribution function is determined solely by actions directed at the top
level domains listed in the foregoing clauses (i) and (ii).
(o) "Net Revenues" means amounts actually received for each D-Plate or
Mixman Studio license sold for which MTVi is entitled to receive a commission
pursuant to Section 3.2(d) of this Agreement, less any returns, chargebacks,
discounts, rebates, taxes, duties, insurance and customer shipping charges.
(p) "Remix Engine" means that portion of Beatnik's proprietary technology
that is contained in the GrooveGram and used in conjunction with the Beatnik
Player to permit the Internet end user to manipulate the RMF Formatted files.
(q) "Sonify" means integrate Beatnik sourced sound components into a
Website such that Users who have downloaded the appropriate Beatnik browser
plug-in software module will hear such sound components when interacting with
certain elements on the Website.
(r) "Term" is defined in Section 20 below.
(s) "Top Line Artist" means any musical performer who has either (i) in
the last year reached the top 30 North American concert ticket gross sales in
the last year as stated by Billboard, (ii) has sold at least one million album
copies in aggregate over the last two years, (iii) has sold at least five
hundred thousand single copies in aggregate over the last one year, (iv) is or
was listed on the Billboard Top 50 during the last eighteen months, (v) during
the past year is an emerging hot artist based on at least five (5)
mentions in the on-line reviews, press reviews or club scene articles listed on
Schedule A attached hereto, (vi) is popular on the world wide web as measured by
being one of the artists with the highest number of chats as determined by three
online reviews listed on Schedule A attached hereto within the last year, (vii)
has been a subject of any top 100 searches during any month within the last six
months using the following search mentions in the on-line reviews, press reviews
or club scene articles listed on Schedule A attached hereto, (vi) is popular on
the world wide web as measured by being one of the artists with the highest
number of chats as determined by three online reviews listed on Schedule A
attached hereto within the last year, (vii) has been a subject of any top 100
searches during any month within the last six months using the following search
4
engines: Yahoo, Lycos, Alta Vista and Xxxxxx.xxx, (viii) has been during the
past year or is scheduled to be an MTV featured artist; or (ix) any artist as
mutually agreed upon by the parties.
(t) "Users" means individual visitors to the MTVi Affiliate Sites.
(u) "Viacom" means Viacom International Inc., a Delaware corporation.
(v) "Website" shall mean any specific or unique physical or logical
address on that portion of the publicly available network of computer networks
commonly referred to as the Internet and also known as the "World Wide Web."
2. Content Integration.
2.1. Beatnik Content and Applications.
(a) During each Development Period (defined below), pursuant to this
Section 2.1 throughout the Term, Beatnik shall use commercially reasonable
efforts to license and make available to MTVi at least one Application that MTVi
shall be permitted to link to for at least a forty-five (45) day period from one
or more web pages within at least one MTVi Named Site, produced by or for
Beatnik with a Top Line Artist who is selected in accordance with Section
2.1(c), such MTVi Named Site and web page to be chosen by MTVi in its sole
discretion based on the genre of such artist, the genre of the Application and
any desire to provide branded product or event tie-ins (the "Featured
Application"). Any Featured Application that is linked from any home page of an
MTVi Named Site shall be exclusive to MTVi, and shall not be licensed by Beatnik
to appear on any other Website, whether controlled by Beatnik or otherwise, for
a period of forty-five (45) days beginning on the day the link to the
Application first appears on such home page. Any Featured Application shall
appear to reside on the applicable MTVi Named Site but will be hosted on and
distributed from Beatnik controlled servers in accordance with the terms of this
Agreement.
(b) Throughout the Term, MTVi shall place at least one hyperlink that
links to one Featured Application (the "Home Page Promotion") (i) on the home
page of xxx.xxx for at least seven (7) days during the 30 day period following
delivery of the Featured Application and (ii) on a webpage one click below the
home page of xxx.xxx for at least three (3) additional days during such 30 day
period. The Home Page Promotion link shall be denoted by a hyperlink which (x)
if on the xxx.xxx home page, shall be a text link appearing above the "MTV at a
glance" line, (y) if on the xxx.xxx home page but appearing below such line,
shall be a text link with at least two lines of text, one of which will be the
name of the Top Line Artist in such Featured Application, or (z) if on any other
MTVi Affiliate Site home page, shall be a graphical link or button whose
appearance shall be governed by the terms hereunder.
(c) On the first day of each month, Beatnik shall deliver to MTVi a list
of at least three Top Line Artists ("Artist List") from which MTVi may select
one Featured Application. At the time Beatnik delivers the Artist List to MTVi,
Beatnik will use commercially reasonable efforts to inform MTVi of the
parameters of and limitations on
5
promotional activities related to such Featured Application known to Beatnik.
MTVi shall select one, two or three of such Top Line Artists for such Featured
Application for the month within ten (10) business days of its receipt of the
Artist List. Beatnik shall use commercially reasonable efforts to deliver one
Featured Application monthly within thirty (30) days ("Development Period")
after MTVi's notice to Beatnik of MTVi's selection of Top Line Artist. Once MTVi
has delivered such notice of its selection of Top Artists to Beatnik, as
information on additional limitations with respect to such choices becomes
available to Beatnik, Beatnik shall promptly provide MTVi written notice of such
additional limitations applicable to the corresponding selections for the
Featured Application. MTVi may reject any of the selections for the Featured
Application based only on (i) any such additional limitations provided in the
most recent written notice from Beatnik or (ii) combination of such additional
limitations provided in the most recent written notice from Beatnik together
with the limitations previously disclosed to MTVi by Beatnik, so long as such
rejection is provided within five (5) business days after MTVi's receipt of such
written notice of the limitations on which MTVi is basing such rejection;
provided, however, it is agreed MTVi cannot base any such rejection on
-------- -------
limitations or parameters that MTVi has otherwise agreed to in this Agreement.
If MTVi rejects all of its selections for the Featured Application (for a month)
pursuant to the foregoing, then (x) Beatnik will use commercial reasonable
efforts to propose other choices of Top Line Artists for the Featured
Application, (y) MTVi will use commercially reasonable efforts to propose one
artist for a Featured Application, and (z) if the delivery of the Featured
Application is not made within the applicable Development Period, MTVi will be
deemed to have fulfilled the obligations under Section 2.1(b) during such 30 day
period under this Agreement for the purposes of determining whether the related
milestone event has occurred. For the purposes of this Section 2.1(c) only,
written notice may be provided by a E-mail or facsimile in each case with
receipt thereof confirmed, in addition to the methods specified in Section 18.
The current running promotions with Xxxx Xxxxx and Smash Mouth are deemed to
satisfy Beatnik's obligations under the first two months of the Term for
purposes of Section 2.1 and when MTVi has complied with the requirements of
Section 2.1(b) with respect to any such Featured Application, MTVi shall be
deemed to have met its obligations with respect to such Featured Application and
the related milestone event shall be deemed to have occurred.
(d) All Featured Applications shall be compatible with and playable by
the standard Beatnik plug-in module or some other Beatnik software module made
available to the public by Beatnik at no charge.
(e) Beatnik shall have the right to disclose to its potential third party
licensors that the Featured Application may be displayed via the MTVi Affiliate
Sites and that such MTVi Affiliate Sites may link to such Featured Application.
(f) Any MTVi Affiliate Site using or distributing the Beatnik Content
pursuant to this Section 2.1 shall include the name and logo of Beatnik, in
compliance with Beatnik's Trademark Usage Guidelines attached hereto as Schedule
C.
6
(g) In any monthly period during the term that Beatnik fails to deliver a
Featured Application from among MTVi's choices made by MTVi in accordance with
the terms hereunder, due to reasons other than any delay substantially resulting
from MTVi's failure to provide timely notice of MTVi's selections of Top Line
Artists, MTVi shall be deemed to have met its obligations under Section 2.1(b)
for such month and for the purposes of determining whether the related milestone
event has occurred. Any failure of Beatnik to adequately host the Featured
Application shall not in any way require MTVi to take any further action in
order to meet its obligations hereunder. Notwithstanding anything to the
contrary herein, MTVi shall not be obligated to provide a Home Page Promotion
more than twelve (12) times in any annual period.
2.2. Co-Branded Pages.
(a) Within thirty (30) days after the Effective Date, MTVi shall provide
Beatnik a proposed production schedule for the design and creation of Web pages
to appear on the MTVi Named Sites incorporating music-related content, subject
to the terms and conditions hereunder (the "Co-Branded Page"). Within fifteen
(15) days of delivery of such proposed production schedule, Beatnik shall either
approve the production schedule or the parties will mutually agree on an amended
production schedule for such design and creation. The Co-Branded Pages will be
placed on one or more of the MTVi Named Sites. The Co-Branded Pages may also be
placed on other MTVi Affiliate Sites by mutual agreement of the parties. The
Co-Branded Pages will be continuously hosted for the duration of this agreement
and will appear and be hosted completely on the MTVi Named Site. Except for any
Application, MTVi will have sole responsibility for hosting and maintaining the
Co-Branded Pages at its sole expense. The Co-Branded Pages shall only be
viewable by a visitor who links to them directly from a hyperlink placed on a
MTVi Named Site or the Beatnik Website or through a stored URL (e.g., bookmark
or similar index storage mechanism).
(b) Each Co-Branded Page will display certain proprietary features of
both the MTVi Named Site and Beatnik, including trademarks, logos, or links to
either Beatnik Content, Applications, or MTVi content. MTVi and Beatnik will
collaborate on the "look and feel" of the Co-Branded Pages including, but not
limited to, the display, appearance and placement of the parties' respective
names and/or brands and of advertising displayed on the Co-Branded Pages. The
"look and feel" of the Co-Branded Pages shall be developed by MTVi, subject to
the reasonable approval of Beatnik. Notwithstanding the foregoing, in no case
shall MTVi be obligated to include any Beatnik Content on the Co-Branded Pages
which is co-branded with any third party without the prior written consent of
MTVi.
(c) MTVi shall place at least five (5) hyperlinks from five (5) different
webpages residing anywhere within the MTVi Named Sites to the Co-Branded Pages,
three (3) of which will reside on the xxx.xxx Website. If any artist whose work
appears on a Co-Branded Page expressly requires that Beatnik hyperlink to the
artists' webpages, MTVi shall permit Beatnik to include such a hyperlink on any
Application that may be linked to via such Co-Branded Page, subject to MTVi's
prior approval in regards to the
7
hyperlink's appearance and in accordance with the rights and restrictions
contained in the grant.
(d) Beatnik shall host any and all Applications that are mutually agreed
upon as elements of the Co-Branded Pages. Beatnik shall make its reasonable
efforts to furnish Applications for such purpose, including procuring any
underlying intellectual property rights necessary, and to adequately host and
maintain such Applications in the manner necessary in order for MTVi to fulfill
its obligations to Beatnik hereunder.
(e) As between MTVi and Beatnik, MTVi shall own the copyright in and to
the Co-Branded Pages, except the Beatnik Content, the Beatnik Technology,
Beatnik Marks and Applications owned by Beatnik or its licensors, as applicable.
Nothing in the foregoing shall grant or transfer ownership or any right to the
Beatnik name and logo, Beatnik Content, Beatnik Technology or Applications to
MTVi. As between MTVi and Beatnik, Beatnik will own all right title and
interest in and to the Beatnik Content, Beatnik Technology, Beatnik Marks and
Applications.
2.3. MTVi Webpage Background Music.
(a) During the Term of, and subject to the terms of, this Agreement,
Beatnik shall provide MTVi, on a non-exclusive basis, one hundred (100)
different music clips, from those clips made available by Beatnik from the
Headspace Library, to be used as webpage background music on any MTVi Affiliate
Site, as determined by MTVi in its sole discretion (the "S-Track Clips"). The
S-Track Clips shall be compatible with and playable by the standard Beatnik
plug-in or some other Beatnik software made available to the public at no cost.
Beatnik will make available such S-Track Clips within five (5) days of the
Effective Date. In no case shall an S-Track Clip contain any sound component
that has not been cleared by Beatnik for the use in accordance with this
Agreement as contemplated by Section 15. If and during the time in which, MTVi
uses any S-Track Clip on an MTVi Affiliate Site, MTVi will promote the S-Track
feature via a hyperlink on the applicable MTVi Affiliate Site no more than one
click below the homepage, which hyperlink will be included for so long as the S-
Track Clip is being used by such MTVi Affiliate Site.
(b) MTVi will Sonify at least ten (10) webpages on the MTVi Named Sites,
none of which may be more than two (2) clicks below the homepage of such Site.
MTVi shall make its reasonable efforts to refresh at least five (5) of such
webpages each month during the term of this Agreement.
(c) Beatnik will provide MTVi with access to Beatnik's Licensing Portal
and a credit of fifty thousand dollars ($50,000) solely for use against
purchases of licenses to music, sound effects and other sound components from
the Licensing Portal. Purchases made through the Licensing Portal will be
subject to the terms and conditions applicable to the Licensing Portal,
including without limitation, the prices set forth therein. In the event MTVi
begins to use any item included in the Licensing Portal, except for the S-Track
Clips used pursuant to Sections 2.3(a), MTVi will permit Beatnik to (i) develop,
use and publish in trade publications one success story regarding this Agreement
and the
8
relationship reflected herein, the text of which will be subject to MTVi's prior
approval and (ii) use and publish the MTVi trademark in Beatnik's upcoming print
ad campaign solely to the trade, subject to MTVi's approval of each use, and
further subject to MTVi's Trademark Usage Guidelines, attached hereto as
Schedule D. Beatnik will be responsible for all development and costs associated
with the print ad campaign and the success story publication. MTVi agrees to use
commercially reasonable efforts to review such success story and print ads in a
timely manner.
3. Beatnik Promotion.
3.1. General. Subject to the terms of this Agreement, throughout the Term,
the package of placements, promotions and links for the Beatnik Site on the MTVi
Affiliate Sites as described in Section 2 of this Agreement shall conform with
the following requirements:
(a) Except to the extent otherwise expressly described herein, the
appearance of the Beatnik promotional vehicles on the MTVi Affiliate Sites will
be as mutually agreed by the parties and will be subject to (i) final approval
of MTVi and Beatnik, such approval to be based on the reasonable business
judgment of MTVi and Beatnik and not to be unreasonably withheld or delayed, and
(ii) standard, generally applicable technical limitations.
(b) MTVi reserves the right to redesign or modify the organization,
structure, "look and feel," navigation and other elements of any portion of the
MTVi Affiliate Sites. In the event such modifications materially affect the
promotional placements for Beatnik described above, MTVi will promptly notify
Beatnik and provide Beatnik with a comparable package of promotional placements
which are reasonably satisfactory to Beatnik. No such redesign or modification
to the MTVi Affiliate Sites provided for in this Section will affect the
Impressions guarantee in this Agreement.
(c) No Beatnik button, banner, or logo: (i) shall have dimensions larger
than 468 pixels wide by 60 pixels high, (ii) shall contain more than six seconds
of "looped" animation, (iii) be a file size of no greater than 20K, or (iv)
shall be "interruptive ads," which includes but is not limited to Interstitial
or pop-up ads. All banner advertisements, buttons or logos provided by Beatnik
must be in compliance with all applicable federal, state and local laws, rules
and regulations, including, without limitation, consumer protection laws and
rules and regulations governing product claims, truth in labeling, and false
advertising. The foregoing limitations on the Beatnik buttons, banners and logos
are based on the industry standard, and if the industry standard changes, then
the limitations will be adjusted accordingly, subject to the mutual agreement of
the parties not to be unreasonably withheld.
(d) During the Term, MTVi shall deliver at least 2 Million Impressions
per month in aggregate; provided, however, that at least 80% of such Impressions
per month must be on MTVi Named Sites. On a quarterly basis, MTVi will deliver
to Beatnik a report that describes (in reasonable detail) MTVi's calculation of
Impressions delivered during the previous month.
9
(e) In the event that MTVi fails to deliver the guaranteed number of
Impressions specified above, MTVi will "make good" the shortfall by providing
Beatnik with a number of substitute Impressions equal to such shortfall by
providing additional hyperlinks to Beatnik content on the MTVi Affiliate Sites
as soon as reasonably possible, but in no event later than sixty (60) days after
the month in which such shortfall occurred; provided that if the shortfall
occurs in the number of Impressions applicable to the MTVi Named Sites, only
Impressions on such MTVi Named Sites may be used to "make good" the shortfall.
If MTVi is unable to "make good" the shortfall within such sixty (60) day
period, MTVi will provide Beatnik with an equivalent number of Impressions as
part of the additional advertising provided to Beatnik pursuant to Section 4,
without charge. The foregoing "make good" provision sets forth the entire
liability of MTVi, and Beatnik's sole remedy, for MTVi's breach of its
guaranteed Impression obligations.
(f) If any Featured Application or Application appearing on the Co-
Branded Pages contain a hyperlink to another Application, such linked
Application must appear on a Co-Branded Page. Any instant buy buttons that
appear on any Application accessed through the Co-Branded Pages shall comply
with the requirements of any MTVi Affiliate Site e-commerce contractual
requirements. No Application accessed from the Co-Branded Pages will contain
any advertising other than as expressly permitted herein. At the time any
Featured Application or any other Application linked to by the Co-Branded Pages
requests an email address from the User, such Application shall also prompt the
User with an announcement that the User has the option to sign-up for a
newsletter mailing list for an MTVi related newsletter.
3.2. Other Promotions.
(a) MTVi will permit Beatnik use of its logo in Co-Branded in-store
promotions of Beatnik's products, including at least one Co-Branded Mixman
product including D-plates produced by Beatnik at its own expense. MTVi will
have the right to prior written approval for such use.
(b) At the beginning of each quarter during the Term, MTVi shall draft a
press release announcing the progress of any of the activities described in this
Agreement, including that Beatnik is the featured technology platform for user
interactive music remix web browsing tools for MTVi. Beatnik shall provide MTVi
with quotes and product specifications for the press release. Any such press
release shall be subject to Beatnik's comments and approval in its sole
discretion. Any press release mutually agreed by prior written consent of both
parties shall be promptly released. Upon execution of this Agreement, MTVi and
Beatnik shall prepare and release a press release announcing this relationship,
the content of which will be mutually approved by the prior written consent of
both parties. Notwithstanding the foregoing, each party agrees that it shall not
use the name, logo or otherwise refer to the other party or the existence of
this agreement (directly or indirectly) in any media release, public
announcement, public disclosure or promotional campaign without the prior
written consent of the other party, which consent shall not be unreasonably
withheld, except as required by law. Each party further agrees that no press
release shall be released if either
10
party reasonably believes that such press release would violate any federal
securities law or any rule or regulation promulgated by the Securities and
Exchange Commission or any securities law or regulation of any state.
(c) MTVi will negotiate with Beatnik in good faith to enter into a
separate agreement with Beatnik whereby Beatnik shall co-produce Co-Branded
content, including a "D-plate" for the exclusive use by MTVi Affiliate Sites.
(d) (i) During the term of this Agreement, MTVi will offer the Mixman
Studio product and D-plates for sale on the MTVi Named Sites, and MTVi may offer
such items on MTVi Affiliate Sites or the MTVi branded download area which may
be hosted by a third party and, in each case, on webpages to be specified by
mutual consent of the Parties. Beatnik will pay MTVi as a commission a
percentage of Net Revenues for each sale of the Mixman Studio or D-plates made
by Beatnik to a User (i) during the same session in which such User linked from
any MTVi Affiliate Site directly to the Beatnik Site or (ii) via download of the
Mixman Studio product or D-plates, as applicable, from a MTVi Affiliate Site.
The percentage of Net Revenues to be paid or retained by MTVi with respect to
such sales shall be as set forth on a schedule to be agreed upon between the
parties.
(ii) Within thirty (30) days following the last day of each calendar
month in which each party shall submit to the other party a complete and
accurate report stating the total number of D-plates sold and the total number
of Mixman Studio licenses sold during such calendar month by the reporting party
for which MTVi is entitled to a commission pursuant to Section 3.2(d) of this
Agreement and indicating the total Net Revenues and total associated commissions
owed, accompanied by the appropriate payment as follows: (x) In the case of
MTVi, MTVi will pay to Beatnik the Net Revenues from such sales made during such
month, less MTVi's applicable commission and (y) in the case of Beatnik, Beatnik
will pay to MTVi the amount of the commission payable on sales of D-plates and
Mixman Studio licenses made by Beatnik. All payments will be made in U.S.
dollars. Time of payment is of the essence under this Agreement. All amounts
owed hereunder not paid within thirty (30) days of the date when due and payable
will bear interest from the date such amounts are due and payable at the per
annum rate published by Citibank, N.A. as its "prime rate."
(iii) During the term of this Agreement and for three (3) years after
its termination, each party agrees (x) to retain all usual and proper records
and books of account and all usual and proper entries relating to sales of D-
plates and Mixman Studio for which MTVi is entitled to a commission and (y) to
allow the other party's representative to audit the reporting party's documents,
financial statements and business records relevant to the transactions set forth
in Section 3.2(d)(i) in order to verify the reporting party's compliance with
the terms of this Section 3.2(d). Any audit shall be conducted during regular
business hours on reasonable prior notice. Any audit shall be conducted by an
independent certified public accountant selected by the auditing party and
acceptable to the reporting party (but the reporting party may not unreasonably
withhold or delay such acceptance). If the audit reveals any underreporting of
amounts due the auditing party, then the reporting party shall within thirty
(30) days after notice
11
thereof pay the auditing party the full amount of the underpayment and any
accrued interest running from the date payments should have been made had the
reports been accurate. If the reporting party's underreporting for any quarterly
period exceeds five percent (5%) of total amount due to the auditing party for
such period, then the reporting party shall reimburse the auditing party for all
reasonable costs of the audit.
(e) MTVi will use commercially reasonable efforts to provide a joint web
collaboration and event promotion mentioning Beatnik for the MTV Spring Break
tour, MTV Music Awards or similar events in which MTVi is involved.
(f) MTVi will use commercially reasonable efforts, with Beatnik's
acknowledgment, to cooperate with MTVi's television programming division to
consider using MTVi online content, which incorporates Beatnik Technology or
Beatnik Content in one or more MTV's TV properties.
(g) MTVi will use commercially reasonable efforts to facilitate business
discussions between Beatnik and the various divisions/affiliates of Viacom. An
agreement, if any, between Beatnik and one or more such divisions/affiliates
shall be the subject of a separate agreement. Any technology license entered
into in conjunction with any such agreement shall be on substantially similar
terms as the license granted in Section 6(a).
(h) MTVi will incorporate Beatnik QuickClips in the "Emerging Artists"
initiative and use commercially reasonable efforts to incorporate Beatnik
QuickClips in the MTVi branded download area which may be hosted by a third
party. Beatnik covenants that any Beatnik software malfunction that causes
Users to lose control of the User's soundcard shall be repaired and a workaround
provided to MTVi in a reasonably prompt time frame.
4. Additional Advertising.
(a) Beatnik agrees to purchase additional advertising and promotional
sponsorships from MTVi during the Term up to the minimum amount of US $1 Million
(one million dollars) during the 12 month period beginning on the Effective Date
and US $2 Million (two million dollars) during the 12 month period beginning on
the first anniversary of the date of this Agreement. The advertising and
promotional sponsorship opportunities available will be offered by MTVi to
Beatnik on pricing terms in conformity with specified parameters set forth on a
schedule to be agreed upon by the parties.
(b) Promptly after the date hereof and at the beginning of each quarter
throughout the Term, an advertising and sponsorship plan will be developed
jointly by the parties and will be subject to the mutual agreement of the
parties. MTVi will designate a dedicated advertising account manager for
Beatnik. The account manager will be available during normal business hours to
cooperate with Beatnik in developing the plan. Beatnik and the MTVi
representatives from the advertising and sales group will meet once per quarter
to review the account and plan the following quarter's activities.
12
Beatnik's designated manager will attend this quarterly meeting as will a Vice
President or Senior Vice President of Ad Sales of MTVi. The first meeting will
be scheduled to occur within twenty-one (21) days of the execution date of this
agreement.
(c) Payments for such advertising and sponsorships shall be made within
thirty days of Beatnik's receipt of a proper invoice therefor in immediately
available funds payable to MTVN Online, L.P. and paid by wire transfer or check
to an account specified in a funding memorandum to be delivered to Beatnik at
least 10 days before the first (or in the case of any change in such account,
the next) payment is due. Time of payment is of the essence under this
Agreement. All amounts owed hereunder not paid within thirty (30) days of the
date when due and payable will bear interest from the date such amounts are due
and payable at the per annum rate published by Citibank, N.A. as its "prime
rate."
5. Limitations on Hyperlink Destinations.
Notwithstanding anything to the contrary herein, at no time shall MTVi be
obligated to place on the Co-Branded Pages hosted by MTVi any Application or any
other Co-Branded promotional material containing hyperlinks, logos or other
designations of any website owned, controlled by, or under the common control of
XxxxxxXxxxxx.xxx, XX0.xxx, Xxxxxx.xxx, Xxxxxxx.xxx, the proprietary music site
on xxx.xxx, xxxxx.xxx.xxx, XxxxxxxXxxxx.xxx, or Xxxxxx.xxx/xxxxx.xxx.
6. Technology License.
(a) Subject to and in accordance with the terms, conditions, restrictions
and limitations contained in this Agreement, Beatnik grants to MTVi and the MTVi
Affiliate Sites, a world-wide, royalty-free, non-exclusive, license (subject to
termination pursuant to Section 20 by Beatnik) to (i) use the Beatnik Technology
for the sole purpose of rendering sound effects on the MTVi Affiliate Sites,
(ii) distribute the Beatnik GrooveGram Remix Engine API, the QuickClip API, and
the Easysonifier API, solely to Users of the MTVi Affiliate Sites, and (iii)
make copies of each Beatnik Technology solely to the extent necessary to
exercise its rights in clause (i) and (ii) above, it being understood that such
copies shall only reside on the network servers, mirror sites, caching servers
or equivalent devices under the control of MTVi or Affiliates of MTVi. Other
than as expressly provided in this Section 6(a), MTVi shall have no right to
sublicense, distribute, use, modify or create derivative works of the Beatnik
Technology except with prior written consent. Any MTVi Affiliate Site using or
distributing the Beatnik Technology pursuant to this Section 6(a) shall include
the name and logo of Beatnik, subject to compliance with Beatnik's Trademark
Usage Guidelines attached hereto as Schedule C.
(b) Beatnik shall provide MTVi Affiliate Sites and their website
developers phone, web and on-site support in a manner consistent with the terms
and conditions set forth on Schedule B. Beatnik will provide Users web support
via email in a manner consistent with the manner in which Beatnik provides such
support to end users of Beatnik Technology in general.
13
(c) If Beatnik makes an alpha and/or beta software program with respect
to new alpha or beta versions of Beatnik Technology, which program is made
generally available to Beatnik's relationship partners, Beatnik shall allow MTVi
to participate in such program on the same terms and conditions as such
relationship partners.
7. Content License.
Subject to and in accordance with the terms, conditions, restrictions and
limitations contained in this Agreement, Beatnik grants to MTVi and the MTVi
Affiliate Sites, a world-wide, royalty-free, license for the Term to (i)
distribute the Beatnik Content provided to MTVi by Beatnik pursuant to Section 2
and Section 4 of this Agreement from the MTVi Affiliate Sites as expressly
provided in Section 2 and Section 4 of this Agreement and with regard to uses
other than Section 2, Section 4, and Section 10 subject to applicable third
party consent, and (ii) make copies of Beatnik Content provided to MTVi by
Beatnik pursuant to Section 2 and Section 4 of this Agreement to the extent
necessary to exercise its rights in clause (i) above, it being understood that
such copies shall only reside on the network servers, mirror sites, caching
servers or equivalent devices under the control of Beatnik and will appear to
reside on the MTVi Affiliate Sites. Other than as expressly provided in this
Section 7, MTVi shall have no right to sublicense, distribute, use, modify or
create derivative works of the Beatnik Content except with Beatnik's prior
written consent. This license shall be non-exclusive except for those terms
hereunder expressly providing for an exclusive license.
8. Trademark License.
Beatnik hereby grants to MTVi and the MTVi Affiliate Sites a non-exclusive,
worldwide, royalty free license during the Term to use, reproduce and display
the Beatnik name and logo (i) to indicate the location of the Beatnik Content as
set forth herein and (ii) in connection with the marketing and promotion of
Beatnik by MTVi, subject to MTVi's compliance with Beatnik's Trademark Usage
Guidelines attached hereto as Schedule C. Beatnik shall have the right to
approve the appearance and placement of the Beatnik name and logo in any
marketing and promotion materials created by MTVi in accordance with the terms
of Sections 2, 3 and 4. To the extent allowed under the applicable license
grant to Beatnik, Beatnik grants MTVi the right to use the names of the artists
who created the Beatnik Content provided by Beatnik to MTVi pursuant to Sections
2, 3 and 4 of this Agreement, to the extent that such names are included in such
Beatnik Content being used. Beatnik will notify MTVi of the extent to which
such names may be used.
9. Ownership of Trademarks.
Each party hereby covenants and agrees that the trademarks, trade names,
service marks of the other party are and shall remain the sole and exclusive
property of that party and neither party shall hold itself out as having any
ownership rights with respect thereto. Any and all goodwill associated with the
use of a party's name and logo shall inure directly and exclusively to the
benefit of such party.
14
10. Syndication Rights.
Beatnik grants MTVi a royalty free, non-exclusive, worldwide license during
the Term to syndicate any Beatnik-owned features appearing on the Co-Branded
Pages, including, without limitation, any Beatnik Content and Beatnik
Technology; each syndication to be approved by Beatnik in writing. With respect
to audience measurement, any such syndicated or sublicensed features from the
Co-Branded Pages shall be attributed to both Beatnik and MTVi and both Beatnik
and MTVi shall represent the same to any third party, subject to the mutual
approval of the specific form of such attribution. If in any case a third party
audience measurement firm requires that attribution be assigned to either MTVi
or Beatnik but not both, then such attribution shall be assigned to MTVi.
11. Users' Usage Data.
(a) Beatnik hereby acknowledges and agrees that MTVi shall own all
information concerning Users' usage of the Beatnik Content made available on the
MTVi Affiliate Sites and other customer data and information MTVi collects and
retains from the use of the Co-Branded Pages or any other webpages on the MTVi
Affiliate Sites (the "Usage Data"). Notwithstanding the foregoing, MTVi and
Beatnik shall both have a right to use any registration data provided by Users
of the MTVi Affiliate Sites who download Beatnik software from the MTVi
Affiliate Sites, provided that (i) Beatnik must comply with MTVi's stated
privacy policies and the Online Privacy Guidelines, (ii) MTVi must comply with
Beatnik's stated privacy policies and (iii) neither party may sell or otherwise
transfer such registration data without the written consent of the other party.
(b) MTVi shall make reasonable efforts to provide Beatnik the Usage Data
and quarterly reports summarizing the Usage Data on an aggregate basis and in
such a manner that is reasonably relevant to Beatnik's product development
efforts.
(c) In no case is either party obligated to collect or provide to the
other party any User information in a manner that would (i) violate any state or
federal law governing a person's privacy or (ii) contravene the intent of its
stated privacy policy or the Online Privacy Guidelines attached hereto.
(d) Beatnik shall provide MTVi with quarterly reports summarizing the
number of downloads of Beatnik software to Users linking from the MTVi Affiliate
Sites in connection with the promotions set forth in Section 3.2(d).
(e) Beatnik shall have the right, and MTVi acknowledges and agrees that
Beatnik will have the right, to disclose to its third party licensor of
information included in an Application the email addresses provided by Users
when such Users request information regarding the artist appearing (or whose
music appears) in such Application, subject to the Online Privacy Guidelines
attached hereto as may be amended from time to time and applicable law.
15
12. Designated Liaison.
Each party shall designate one or more persons, who are either an employee
or independent contractor to serve as a liaison through which the other party
may present business opportunities (the "Liaison"). MTVi shall designate one
person who is a Manager or above from its strategic partnership group and two
persons who are Directors or above from its senior production staff as Liaisons.
Beatnik covenants that it will provide product use training in person to three
senior members of the MTVi production staff. MTVi agrees to permit the Liaisons
to make reasonable efforts to initiate business strategy discussions between
Beatnik and other members of MTVi Internet projects. The failure of a Liaison
to successfully generate any interest in any business opportunity or if any
discussions fail to lead to a definitive agreement shall not constitute a breach
of this Agreement.
13. No Agency.
Beatnik agrees that it is not an agent of MTVi or any Affiliate of MTVi in
any way. MTVi agrees that it is not an agent of Beatnik in any way. Beatnik
covenants that it shall not represent itself as an agent of MTVi or any
Affiliate of MTVi with the power to select and/or specify elements that will
appear on MTVi Affiliate Sites.
14. Representations, Warranties and Agreements.
Each party represents and warrants that it has the right and power to enter
into and fully perform this Agreement and to make the commitments it makes
herein and to perform fully its obligations hereunder. Beatnik represents and
warrants that it has obtained, or will have obtained when such Beatnik
Technology or Beatnik Content is delivered to MTVi or any MTVi Affiliate Site,
all necessary licenses, permissions and consents required to license the MTVi
Affiliate Sites to use and/or distribute the applicable Beatnik Technology and
Beatnik Content in accordance with the terms of this Agreement, including,
without limitation, all sync licenses, artist consents, or digital sound
recording performance licenses.
15. Copyright License Fees and Union Payments.
Beatnik shall promptly and fully pay: (i) any fees that become payable as
a result of the public performance or distribution of any sound recording
embodied in any Beatnik Content or Application provided by Beatnik to MTVi
pursuant to this Agreement and arising directly from such Beatnik Content or
Application distributed from the MTVi Affiliate Sites; (ii) any fees that become
payable as a result of the public performance or distribution of any underlying
works embodied in any Beatnik Content or Application provided by Beatnik to MTVi
pursuant to this Agreement and arising directly from such Beatnik Content or
Application distributed from the MTVi Affiliate Sites; (iii) any fees due any
third party pursuant to a collective bargaining agreement covering the creation
and exploitation of the Beatnik Content or Applications distributed from the
MTVi Affiliate Sites and arising directly from such Beatnik Content or
Application provided by Beatnik to MTVi pursuant to this Agreement, and (iv) any
fees that became payable as a
16
result of any sync license or mechanical license obtained for Beatnik Content or
Application provided by Beatnik to MTVi pursuant to this Agreement.
16. Indemnification.
(a) Beatnik, at its own expense, will indemnify, defend and hold harmless
MTVi and the MTVi Affiliate Sites and any employees, representatives, agents of
MTVi or any Affiliate of MTVi (each a MTVi Indemnified Person), from and against
any and all claims made by a third party and all damages, liabilities, costs and
expenses (including legal expenses and reasonable counsel fees) arising
therefrom brought against any MTVi Indemnified Person arising from (i) any
breach of Beatnik's representations, warranties or undertakings hereunder, (ii)
a claim that any trademark, service xxxx or other brand, feature, any Beatnik
Technology, Beatnik Content or Application provided by Beatnik for use and/or
distribution by the MTVi Affiliate Sites pursuant to this Agreement infringes in
any manner any copyright, patent, trademark, trade secret or any other
intellectual property right of any third party, is or contains any material or
information that is defamatory, libelous, slanderous, or that violates any law
or regulation, or that otherwise violates any rights of any person or entity,
including, without limitation, rights of publicity, privacy or personality, or
(iii) the terms of any applicable collective bargaining agreement. Such MTVi
Indemnified Party shall provide Beatnik with prompt notice of any such claim
which could result in indemnification hereunder, but failure to so notify
Beatnik shall not affect Beatnik's obligations to indemnify hereunder unless
such failure prejudices Beatnik's ability to defend the claim. Such MTVi
Indemnified Person shall provide reasonable assistance in any defense or
settlement at Beatnik's expense, and shall permit Beatnik to assume and control
the defense of such action (unless a conflict or potential conflict exists
between Beatnik and MTVi Identified Person) upon Beatnik's written notice to the
MTVi Indemnified Person of its obligation to so indemnify, so long as Beatnik
does not enter into any settlement or compromise of any such claim which would
result in any liability to any MTVi Indemnified Party, without the MTVi
Indemnified Person's prior written consent which will not be unreasonably
withheld.
(b) MTVi, as its own expense, will indemnify, defend and hold harmless
Beatnik and its employees, representatives, agents and Affiliates (each a
"Beatnik Indemnified Person"), from and against any and all claims made by a
third party and all damages, liabilities, costs and expenses (including legal
expenses and reasonable counsel fees) arising therefrom brought against a
Beatnik Indemnified Person arising from (i) any breach of MTVi's
representatives, warranties or undertakings hereunder, (ii) a claim that any
trademark, service xxxx or other brand feature, any material, product or service
produced, distributed, offered or provided by MTVi for use and/or distribution
by the MTVi Affiliate Sites, other than any claim arising in connection with or
relating to any Beatnik Content, Application, Beatnik Technology, or any
trademark, trade secret, patent, copyright or other intellectual property owned
or controlled by Beatnik or its Affiliates, infringes in any manner any
copyright, patent, trademark, trade secret or any other intellectual property
right of any third party, is or contains any material or information that is
defamatory, libelous, slanderous or that violates any law or regulation, or that
otherwise violates any rights of any person or entity, including without
limitation,
17
rights of publicity, privacy or personality or (iii) the terms of any applicable
collective bargaining agreement. Such Beatnik Indemnified Person shall provide
MTVi with prompt notice of any such claim which could result in indemnification
hereunder, but failure to so notify MTVi shall not affect the MTVi's obligations
to indemnify hereunder unless such failure prejudices MTVi's ability to defend
the claim. Such Beatnik Indemnified Person shall provide reasonable assistance
in any defense or settlement at MTVi's expense, and shall permit MTVi to assume
and control the defense of such action (unless a conflict or potential conflict
exists between Beatnik and MTVi Identified Person) upon MTVi's written notice to
the Beatnik Indemnified Person of its obligation to so indemnify, so long as
MTVi does not enter into any settlement or compromise of any such claim which
would result in any liability to any Beatnik Indemnified Party, Beatnik or its
Affiliates without the Beatnik Indemnified Person's prior written consent which
will not be unreasonably withheld.
17. Limitation of Liability.
UNDER NO CIRCUMSTANCES SHALL BEATNIK, MTVi, OR ANY AFFILIATE BE LIABLE TO
THE OTHER PARTY FOR INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL OR EXEMPLARY
DAMAGES ARISING FROM THIS AGREEMENT, EVEN IF THAT PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES, SUCH AS, BUT NOT LIMITED TO, LOSS OF REVENUE OR
ANTICIPATED PROFITS OR LOST BUSINESS. EACH PARTY DISCLAIMS ANY REPRESENTATION OR
WARRANTY, EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY
FOR FITNESS FOR A PARTICULAR PURPOSE IN REGARDS TO ANY PRODUCT OR SERVICE
PROVIDED HEREUNDER EXCEPT FOR ANY THIRD PARTY CLAIM ARISING FROM AN OFFLINE,
NON-INTERNET USE OF BEATNIK CONTENT BY MTVI BEYOND THOSE USES PERMITTED UNDER
THIS AGREEMENT.
18. Notices.
Except as otherwise specifically provided herein, all notices hereunder
shall be in writing and shall be given by registered or certified mail or
Federal Express or similar carrier (prepaid), at the respective addresses
hereinabove set forth, or such other address or addresses as may be designated
by either party. Such notices shall be deemed given when mailed or delivered to
a Federal Express office, except that notice of change of address shall be
effective only from the date of its receipt. A copy of each notice sent:
If to MTVi:
MTVi
000 Xxxxxxxx, 00xx Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000
Attn: General Counsel
If to Beatnik:
18
Beatnik, Inc.
0000 Xxxxx Xx Xxxxxx Xxxxx
Xxx Xxxxx, XX 00000
Attn: General Counsel
19. Assignment.
Neither party may assign this Agreement or its rights hereunder in whole or
in part to any person without the prior written consent of the other party
except if such person is acquiring all or substantially all of the assets of the
party. Any assignment in violation of this Section 19 shall be null and void.
20. Term and Termination.
(a) Term. The term of this Agreement shall commence on the date hereof
and continue for a period of two years (the "Term").
(b) Termination. Either party may terminate this Agreement at any time
in the event of a material breach by the other party of any term, representation
or warranty which remains uncured after thirty (30) days written notice thereof.
Either party may terminate this Agreement immediately if the other party becomes
or is declared insolvent or bankrupt, is the subject of any proceeding related
to its liquidation or insolvency which is not dismissed within ninety (90)
calendar days or makes an assignment for the benefit of creditors.
(c) Notwithstanding any termination of this Agreement, this Section 20(c)
and Sections 1, 2.2(d), 9, 11, 13, 16, 17, 18, 22 and 23 shall remain in full
force and effect.
21. Confidentiality.
(a) Each party covenants to the other party that it will not, either
directly or indirectly through any officer, director, employee, agent or
otherwise, disclose this Agreement, any provisions of this Agreement (except to
the extent such disclosure is required by law to be disclosed or this Agreement
becomes generally available to the public other than as a result of a disclosure
in violation of this Agreement) nor any Confidential Information of the other
party either in whole or in part, without the prior written consent of the other
party.
(b) Any public announcement, filing, release or similar publicity with
respect to this agreement or the contemplated transactions will be issued, if at
all, at such time and in such manner as determined by mutual agreement of the
parties.
22. Issuance of Shares
(a) In consideration of MTVi's entering into this Agreement and the
services already provided to Beatnik by MTVi, Beatnik is hereby issuing to MTVi
800,000 shares of Beatnik's Series E Preferred Stock, par value $.001 per share
(the "Shares"). 400,000 of such Shares shall be subject to repurchase by
Beatnik in accordance with Section 22(b)
19
hereof. Pursuant to the Series E Stock Purchase Agreement, dated as of the date
hereof, by and among Beatnik, MTVi and others (the "Stock Purchase Agreement")
Beatnik has sold to MTVi on the date hereof 600,000 shares of Series E Preferred
Stock, par value $.001 per share. It is hereby acknowledged and agreed that (1)
the representations and warranties of Beatnik and the representations and
warranties of MTVi contained in the Stock Purchase Agreement are hereby
incorporated in this Agreement with respect to the Shares and are hereby being
made on the date hereof by Beatnik for the benefit of MTVi and by MTVi for the
benefit of Beatnik, as the case may be, with respect to the Shares, and (2) the
terms and conditions of the Stock Purchase Agreement are incorporated herein by
reference and made a part hereof with respect to the Shares.
(b) Beatnik shall have the right to cause MTVi to forfeit 400,000 of the
Shares as follows: (i) if on or prior to the first anniversary of the date
hereof any of the milestone events listed on Schedule E under the heading "First
Anniversary Milestones" has not occurred (nor deemed to have occurred) and have
not been satisfied nor waived in writing, or (ii) if between the first
anniversary of the date hereof and the date eighteen months from the date hereof
the event listed on Schedule E under the heading "Eighteen Month Milestone" has
not occurred (or deemed to have occurred ) or been satisfied or waived in
writing, then upon written notice to MTVi specifying which milestones have not
occurred (nor deemed to have occurred) and have not been satisfied or waived in
writing (the "Forfeiture Notice") given no later than 30 days after such first
anniversary date in the case of clause (i) or eighteen month date in the case of
clause (ii), Beatnik shall have the right to cause forfeiture from MTVi of a
number of Shares (the "Unearned Shares") equal to the product of (i) 50,000 and
(ii) the number of milestone events which have not occurred (nor deemed to have
occurred) and not been satisfied or waived in writing, as the case may be, on or
prior to such first anniversary date in the case of clause (i) or eighteen month
date in the case of clause (ii). MTVi shall forfeit to Beatnik the Unearned
Shares no later than 20 days after such Forfeiture Notice is received by MTVi.
(c) If a milestone event listed on Schedule E occurs (or is deemed to
have occurred), or has been satisfied or waived in writing on or prior to (i)
the first anniversary of the date hereof in the case of the events listed under
the heading "First Anniversary Milestones" or (ii) the date eighteen months
after the date hereof in the case of the event listed under the heading
"Eighteen Month Milestone," then on the date such event occurs (or is deemed to
have occurred), is satisfied or waived in writing, as the case may be, 50,000
Shares shall no longer be subject to forfeiture to Beatnik under this Agreement
and Beatnik shall, within 10 business days, cause the legend referred to in
Section 22(f) hereof to be removed from the certificates representing such
Shares. During the period that any Share is subject to forfeiture by Beatnik
under this Agreement, such Share shall be referred to herein as a "Restricted
Share."
(d) If a milestone event does not occur or has not been satisfied and
such nonoccurrence or failure to satisfy is the result of (or substantially the
result of) Beatnik's action or inaction or the occurrence of an event under
Beatnik's control, including without limitation, failure to timely provide the
requisite Beatnik Content, Application, Mixman Studio or Beatnik Technology to
MTVi, then for all purposes of this Agreement the milestone event shall be
deemed to have occurred.
20
(e) (i) With respect to any Restricted Share, for the period from the
date hereof until the date on which any such Restricted Share is no longer
subject to forfeiture to Beatnik pursuant to Section 22(b) or (c) hereof, MTVi
may not sell, transfer, pledge, or otherwise encumber or dispose of such
Restricted Share and such Restricted Share shall not be transferable, including,
but not by way of limitation, by execution, levy, garnishment, attachment,
pledge, or in any other similar manner.
(ii) The Shares shall not be transferred except in accordance with
this Agreement (including pursuant to Section 3.6 of the Stock Purchase
Agreement which is incorporated herein pursuant to Section 22(a)) or the Amended
and Restated Rights Agreement, dated as of the date hereof by and among Beatnik
and the shareholders listed on Exhibit A thereto, as each may be amended,
modified and supplemented from time to time.
(f) If there is a dispute between the parties as to whether a milestone
event has occurred, is deemed to have occurred or has been satisfied or waived,
the parties will arrange for Xxxxxxxx Xxxxxxxx and Xxxxxxxx Xxxxxxxxxxx to
discuss the matter and attempt to resolve any dispute.
(g) The stock certificates evidencing the Shares shall be delivered to
MTVi on the date hereof. All certificates representing Restricted Shares shall
bear the following legend reflecting the applicability of this Agreement to the
Restricted Shares represented by such certificate. Beatnik shall cause such
legend to be removed from the certificates representing each Restricted Share on
the date such share is no longer subject to forfeiture by Beatnik pursuant to
Section 22(b) or (c) hereof.
THIS CERTIFICATE IS SUBJECT TO, AND IS TRANSFERABLE ONLY UPON
COMPLIANCE WITH, THE PROVISIONS OF THE AGREEMENT AMONG MTVI AND
BEATNIK DATED MARCH 10, 2000. SUCH AGREEMENT PROHIBITS THE TRANSFER
OF THESE SHARES UNTIL CERTAIN MILESTONES ARE MET. ANY TRANSFER OF
THESE SHARES IN VIOLATION OF SUCH AGREMEENT SHALL BE NULL AND VOID. A
COPY OF THE ABOVE REFERENCED AGREEMENT IS ON FILE AT THE PRINCIPAL
OFFICES OF BEATNIK.
(h) The stock certificates evidencing the Shares that are delivered
hereunder shall bear restrictive legends to the extent required by Section 3.7
of the Stock Purchase Agreement which is incorporated herein pursuant to Section
22(a).
(i) If MTVi fails to comply with any of its obligations under this
Agreement and such obligations comprise Milestone Events listed on Schedule E,
then Beatnik's sole remedy with respect to such noncompliance by MTVi shall be
the forfeiture of Restricted Shares pursuant to this Section 22.
21
23. Miscellaneous.
(a) This Agreement contains the entire understanding of the parties
hereto relating to the subject matter hereof and cannot be changed or terminated
except by an instrument signed by both an officer of MTVi and an officer of
Beatnik. This Agreement supersedes all prior and contemporaneous
understandings, agreements and discussions between the parties with respect to
the subject matter hereof, including without limitation, the letter agreement
between the parties dated as of February 16, 2000. A waiver by either party of
any term or condition of this Agreement in any instance shall not be deemed or
construed as a waiver of such term or condition for the future, or of any
subsequent breach thereof. All remedies, rights, undertakings, obligations and
agreements contained in this Agreement shall be cumulative and none of them
shall be in limitation of any other remedy, right, undertaking, obligation or
agreement of either party.
(b) Notwithstanding anything to the contrary herein, the parties hereto
shall be deemed independent contractors and nothing herein shall be construed as
establishing a joint venture or partnership.
(c) This Agreement shall be deemed entered into the State of New York,
and the validity, interpretation and legal effect of this Agreement shall be
governed by the laws of the State of New York applicable to contracts entered
into and performed entirely within the State of New York, with respect to the
determination of any claim, dispute or disagreement which may arise out of the
interpretation, performance, or breach of this Agreement.
(d) The parties hereto are sophisticated and have had the opportunity to
be represented by lawyers throughout the negotiation of this Agreement. As a
consequence, the parties do not believe that the presumptions of any laws or
rules relating to the interpretation of contracts against the drafter of any
particular clause should be applied in this case and therefore waive their
effects.
(e) This Agreement shall not become effective until executed by the
parties hereto.
(f) Each party shall bear its own legal fees incurred in connection with
the transactions contemplated hereby, provided, however, that if any party to
this Agreement seeks (i) to enforce its rights under this Agreement by legal
proceedings or otherwise or (ii) damages arising from and relating to a breach
of any representation, warranty, covenant or agreement made hereunder, the non-
prevailing party shall pay all costs and expenses incurred by the prevailing
party, including, without limitation, all reasonable attorneys' fees.
22
(g) This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, and all of which, when taken together, shall
constitute one and the same instrument.
ACCEPTED AND AGREED:
MTVN ONLINE, L.P. BEATNIK, INC.
By: By: /s/ Xxxxxxxx Xxxxxxx
_________________________________ ----------------------------
Title: CEO and President Title: President & CEO
------------------------------
SCHEDULE A
TOP LINE ARTIST CRITERIA
Online reviews, press reviews or club scene articles:
XxxxxxxXxxxx.xxx
Xxxxxxx.xxx
Xxxx.xxx
XxxxxxxxxxxxxXxxx.xxx
Xxxxxx.xxx
Xxxxxx.xxx
Xxxxxxxxxxxx.xxx
Xxxx.xxx
Online reviews for determining number of chats:
XxxxxxxXxxxx.xxx
Xxxxxxx.xxx
Xxxx.xxx
XxxxxxxxxxxxxXxxx.xxx
Xxxxxx.xxx
Xxxxxx.xxx
Xxxxxxxxxxxx.xxx
Xxxx.xxx
23
SCHEDULE C
LEADER'S PROGRAM
The Beatnik Leaders Program shall consist of the following products and
services:
(a) Products:
(i) Beatnik Leaders Kit - This kit shall include the following items:
(1) Exclusive Beatnik tutorials and case studies
(2) Exclusive Beatnik sonification style guide
(3) Exclusive Beatnik "Branding with Sound" white paper
(ii) Beatnik Pro Version Tools - These tools shall include the
following items:
(1) Beatnik Editor Pro with MP3
(2) Beatnik Converter Pro with MP3
(3) Beatnik Actionset Pro for Dreamweaver
(4) Beatnik Xtra Pro for Director
Each of the Beatnik Tools comes with 15 licenses for the
individuals listed in Exhibit C. Each such license is subject
---------
to the terms and conditions of this letter agreement.
(b) Services:
(i) One year access to controlled "Leaders only" discussion boards for
technical support
(ii) One year priority email technical support
(iii) Value Added Developer support for reselling Beatnik content and/or
technology such as Groovegrams, and Web Site Soundtracks (Jook
Joints)
You will receive one (1) copy of the Beatnik Leaders Kit for every person
listed in Exhibit A, which will contain further details concerning Services,
---------
including without limitation, time periods in which Services are available,
the location of such discussion boards and the email addresses where
technical and value-added support can be obtained. These Beatnik Leaders Kits
are licensed to you pursuant to the terms and conditions set forth herein and
the terms and conditions set forth in the end user licenses in the Beatnik
Leaders Kits delivered to you.
(c) Optional Services: The following Optional Services will be provided
to you by us for the fees set forth below:
(i) Training Options:
(x) In-House Training (recommended): At a fee to be mutually
agreed upon by the
parties, plus expenses.
(y) Quarterly workshops, see below.
(ii) Support Options:
(x) A la carte Telephone Support: At a fee to be mutually agreed
upon by the parties.
(y) Eight hours Telephone Support per month: No charge.
(iii) Additional Sonifiers:
(x) Per person over 15 listed in Exhibit A: At a fee to be
----------
mutually agreed upon by the parties.
(iv) Travel expenses and additional in-house training that has not been
listed here, as well as any telephone support that we provide that is
not covered by an existing telephone support package, including any
telephone support in excess of any five-hour optional service package
you may have purchased, will be billed as described above and you will
receive an invoice for such amounts on not less than a monthly basis.
All payments shall be due and payable within 30 days of our sending of
such invoice. Your failure to pay such amounts may result in the
termination of our relationship in which case you will be required to
immediately return all Beatnik Leaders Kits and Beatnik Tools that have
been licensed to you as part of the Program, and delete any and all
copies of the Beatnik Tools from the hard drives of the computers on
which they have been installed.
(v) Quarterly workshops available in Boston, New York, Chicago, San
Francisco, and Los Angeles. These will be optional and subject to an
additional charge. Contact Xxxx Xxxxxx (xxxx@xxxxxxx.xxx) for details.
----------------
WE DO NOT GUARANTEE THE BEATNIK LEADERS KITS OR TOOLS AND THEY ARE BEING
PROVIDED TO YOU WITHOUT ANY WARRANTY OF ANY KIND. IN PARTICULAR, PLEASE NOTE
THAT WE EXPRESSLY REJECT ALL WARRANTIES OF ANY KIND RELATED TO THE LEADERS KIT,
TOOLS OR TECHNICAL SUPPORT, INCLUDING, WITHOUT LIMITATION, THE IMPLIED
WARRANTIES OF MERCHANTABILITY, NONINFRINGEMENT AND FITNESS FOR A PARTICULAR
PURPOSE.
Your participation in the Program does not in any way transfer to you any
ownership interest in the Beatnik Leaders Kits or Beatnik Tools, and all
ownership rights to such Beatnik Leaders Kits and Beatnik Tools remains with us.
As a participant in the Program your company will be granted 15 non-exclusive
and non-transferable licenses to use the Beatnik Leaders Kits and Beatnik Tools
for the term of the Agreement. To validate the licenses granted to your company
by Beatnik as a part of this program, you must list in Exhibit A all individuals
---------
who will be using Beatnik Leaders Kits and Beatnik Tools. Up to 15 individuals
within your company will be included with your entry to the Program. Additional
licenses are available below at additional cost. Only individuals listed in
Exhibit A as the "Head Sonifier" or the "Sonifiers" may use the Beatnik Leaders
---------
Kits and Beatnik Tools, unless otherwise agreed to by us in writing. You may not
copy, distribute, otherwise disseminate or modify the Beatnik Leaders Kits. You
may not copy, distribute, otherwise disseminate, modify, reverse engineer or
attempt to decompile the Beatnik Tools. Any such actions shall terminate your
participation in the Beatnik Leaders Program and, in addition to any other
remedies we may have, you will be required to immediately return any and all
copies of the Beatnik Leaders Kits and Beatnik Tools to us and delete any and
all copies of the Beatnik Tools from the hard drives of the computers on which
they have been installed. The provisions of this paragraph will survive
termination of your participation in the Beatnik Leaders Program.
In addition, Beatnik reserves the right to terminate your participation in the
Leaders Program immediately if, in Beatnik's sole but reasonable discretion, you
use the Beatnik Leaders Kit or the Beatnik Tools in an inappropriate or
unauthorized manner, including, but not limited to, use in connection with
pornographic or illegal sites or activities, or in a manner that may tarnish
Beatnik's trademarks and/or service marks and their attendant goodwill. Upon
termination of your participation in the Leaders Program, all licenses granted
hereunder shall terminate, and you will be required to immediately return any
and all copies of the Beatnik Leaders Kits and Beatnik Tools to us and delete
any and all copies of the Beatnik Tools from the hard drives of the computers on
which they have been installed.
Exhibit A to Beatnik Leaders Program
------------------------------------
Head Sonifier & Sonifier
Head Sonifier (Sonifier #1)
Name: ____________________________ Sonifier #5
Signature:________________________ Name: ____________________________
E-mail: __________________________ E-mail: __________________________
Phone: ___________________________ Phone: ___________________________
Title: ___________________________ Title: ___________________________
Sonifier #2 Sonifier #6
Name: ____________________________ Name: ____________________________
E-mail: __________________________ E-mail: __________________________
Phone: ___________________________ Phone: ___________________________
Title: ___________________________ Title: ___________________________
Sonifier #3 Sonifier #7
Name: ____________________________ Name: ____________________________
E-mail: __________________________ E-mail: __________________________
Phone: ___________________________ Phone: ___________________________
Title: ___________________________ Title: ___________________________
Sonifier #4 Sonifier #8
Name: ____________________________ Name: ____________________________
E-mail: __________________________ E-mail: __________________________
Phone: ___________________________ Phone: ___________________________
Title: ___________________________ Title: ___________________________
Sonifier #9 Sonifier #13
Name: ____________________________ Name: ____________________________
E-mail: __________________________ E-mail: __________________________
Phone: ___________________________ Phone: ___________________________
Title:____________________________ Title:____________________________
Sonifier #10 Sonifier #14
Name: ____________________________ Name: ____________________________
E-mail: __________________________ E-mail: __________________________
Phone: ___________________________ Phone: ___________________________
Title:____________________________ Title:____________________________
Sonifier #11 Sonifier #15
Name: ____________________________ Name: ____________________________
E-mail: __________________________ E-mail: __________________________
Phone: ___________________________ Phone: ___________________________
Title:____________________________ Title:____________________________
Sonifier #12
Name: ____________________________
E-mail: __________________________
Phone: ___________________________
Title:____________________________
SCHEDULE C
Trademark Usage Guidelines
BEATNIK TRADEMARK USAGE GUIDELINES
----------------------------------
Beatnik's Trademarks and Logos
------------------------------
The following words and logos are trademarks of Beatnik, Inc. in the United
States and/or other countries:
"Beatnik(R)"
"Mixman(R)"
Beatnik Logo
The foregoing shall be referred to herein, collectively, as the "Beatnik
Marks."
Guidelines for Usage
--------------------
Beatnik has established the following set of Guidelines to be followed in
all collateral, advertising, and related activities in which Beatnik's logo and
trademarks are used.
Graphic Element
---------------
Always use production-quality art (electronic or camera-ready) to reproduce
the Beatnik name and/or logo.
Trademark Requirements
----------------------
1. At the first mention of a Beatnik trademark in the body or printed or on-
line material, proper notice of trademark ownership ( e.g. or (R)) must appear.
If the first mention is in a headline, the or (R) does not have to appear at
that mention, provided there is text following where the notice does appear.
2. When writing about Beatnik, its products or technology, trademarks must be
used as adjectives.
3. Advertising and all other printed materials must include credit lines for
Beatnik products and/or technologies. If more than one Beatnik trademark is
used, all trademarks may be incorporated into one sentence. A sample credit
line that meets these criteria is as follows:
The following are trademarks of Beatnik, Inc.: Beatnik(R) Mixman(R) and
the Beatnik logo.
Quality Control and Ownership
-----------------------------
1. MTVi shall ensure that all advertisements, marketing materials or other
documents on which Beatnik's Marks are placed (the "Marked Materials") shall not
reflect adversely upon the good name of Beatnik. MTVi acknowledges that if the
Marked Materials distributed by MTVi were of inferior quality in design,
material or workmanship, the substantial good will which Beatnik has established
and now possesses through Beatnik's Marks would be impaired. Accordingly, MTVi
agrees that the Marked Materials shall be of high standard and
of such nature, style, appearance and quality as shall be adequate and suited to
the protection of the Marks and the goodwill associated therewith.
2. MTVi shall submit for approval, free of cost, two samples to Beatnik of
Marked Materials prior to their dissemination or distribution in order to allow
Beatnik to determine whether (a) such Marked Materials are compliant with this
Agreement, and (b) such Marked Materials are of a high standard and of such
nature, style, appearance and quality as to be adequate and suited to the
protection and enhancement of Beatnik's Marks and the goodwill associated
therewith. If Beatnik disapproves of any sample of the Marked Materials,
Beatnik shall provide MTVi with the specific reasons for such disapproval within
ten (10) working days after receipt thereof. Failure of Beatnik to approve or
disapprove such samples within such ten (10) working day period shall
automatically be deemed approval thereof. Once such Marked Materials have been
approved by Beatnik, MTVi shall not institute any material changes in the
standards, specifications or quality of the Marked Materials, without first
obtaining the approval of Beatnik to such Marked Materials as changed.
3. Beatnik shall have the right to conduct spot checks at MTVi's facilities and
elsewhere on Marked Materials.
4. MTVi shall promptly make all such changes to the Marked Materials as Beatnik
shall request to protect the value of Beatnik's Marks or MTVi shall not use
Beatnik's Marks on such non-conforming Marked Materials.
5. MTVi shall not use Beatnik's Marks, or any part thereof, as part of, or
display such Beatnik's Marks in conjunction with, any other names or trademarks
except with Beatnik's prior written approval. MTVi shall not use any of
Beatnik's Marks or any confusingly similar or diluting xxxx, term or design,
except as expressly authorized in this Agreement, and MTVi shall not attempt to
register or aid any third party in using or attempting to register any such
xxxx, term or design. MTVi shall not use any of Beatnik's Marks in any manner
that will indicate that it is using such xxxx other than as a licensee.
6. Refusal to submit samples, or non-compliance with this Agreement and these
guidelines will result in Beatnik's right to revoke MTVi's license to use
Beatnik's Marks.
7. Beatnik's Marks and the goodwill associated therewith are and remain
Beatnik's exclusive property. MTVi shall acquire no right, title or interest in
Beatnik's Marks or the goodwill associated therewith other than the limited
right to use Beatnik's Marks, as described by the express terms of this
Agreement. All usage of Beatnik's Marks shall inure to Beatnik's benefit. MTVi
shall not at any time do or suffer to be done any act which would impair
Beatnik's Marks or the goodwill associated therewith. MTVi shall take any
actions reasonable requested by Beatnik, including the execution of instruments,
that may be necessary or appropriate to record Beatnik's rights to Beatnik's
Marks in any jurisdiction and perfect these rights in Beatnik's name. MTVi
agrees to take no action inconsistent with Beatnik's ownership of and interest
in Beatnik's Marks, or assist any third party in doing any of the same. Under
no circumstances will anything in this Agreement be construed as granting, by
implication, estoppel or otherwise, any licenses or rights in Beatnik's Marks
not explicitly granted to MTVi herein.
8. MTVi shall promptly notify Beatnik in writing of any actual or suspected
infringement of Beatnik's Marks by a third party of which MTVi becomes aware and
of any available evidence thereof. MTVi shall cooperate, at Beatnik's expense,
with Beatnik's efforts to investigate, terminate and recover damages for any
actual or suspected infringement of the trademarks or logo.
Beatnik reserves the right to amend this Schedule at anytime. MTVi shall
---------
use commercially reasonable efforts to cease use and/or distribution of the
existing non-conforming Marked Materials, within ten (10) days after Beatnik
makes the amendments to this Schedule available to MTV.
--------
SCHEDULE D
MTVi ONLINE TRADEMARK GUIDELINES
Pursuant to the Agreement, MTVi has granted to Beatnik the non-exclusive
right to use the XXXx, XXX, XX0 and SonicNet name, trademark and logo attached
as this Schedule D (the "Xxxx") solely in connection with, for the Term and as
permitted under this Agreement. Beatnik will not use the Xxxx in any other
manner other than as authorized herein.
1. All proprietary rights, title, interest and control of the Xxxx,
including any goodwill or other value generated in connection with the use of
the Xxxx, in the Territory, shall at all times rest with MTVi, but MTVi does not
thereby acquire any interest in Beatnik's business or revenues derived from that
business. At no time shall Beatnik attempt to register the Xxxx or other
materials identical, substantially similar to, or likely to cause confusion with
MTVi's Xxxx.
Beatnik shall comply with all reasonable requirements of MTVi for legal,
creative or artistic reasons in connection with the use of the Xxxx in order to
enable MTVi to protect and ensure consistency in the use of such Xxxx. Beatnik
shall at all times use its reasonable endeavors to monitor any other
unauthorized uses or misuses ("infringements") of the Xxxx, and shall promptly
notify MTVi of any such infringements it discovers. Beatnik agrees to use
reasonable efforts and cooperate with MTVi, upon MTVi's request and at MTVi's
expense, in terminating infringing or unauthorized or wrongful uses of the Xxxx
and undertakes to furnish any documentary evidence or evidentiary materials
which MTVi may reasonably require for the purpose of terminating such uses. In
addition, Beatnik undertakes to use its reasonable efforts to assist and
cooperate with MTVi, at MTVi's expense, in the prosecution of any lawsuits,
legal actions or other proceedings which, in the option of MTVi, are necessary
or advisable to protect the Xxxx. The expense of such proceedings shall be
borne by MTVi. The right to protect such xxxx, as well as the right to
determine in all respects the manner of protection, shall at all times rest
exclusively with MTVi.
As between MTVi and Beatnik, all proprietary rights, title and interest,
including, but not limited to, copyright, in the Xxxx shall rest exclusively
with MTVi.
2. Beatnik acknowledges that MTVi is the owner of the Xxxx and of all
ideas, concepts, trademark and copyrights in copyrightable subject matter
comprised in the Xxxx. It is understood and agreed that Betnik shall not
acquire and shall not claim any title to the Xxxx by virtue of the license
granted to Beatnik or through Beatnik's use of the Xxxx, the parties agreeing
that all use of the Xxxx by Beatnik shall inure for the benefit of the MTVi.
Beatnik will reasonably undertake to execute any instruments, acknowledgments,
assignments or similar documents MTVi reasonably deems necessary or advisable to
confirm or effectuate MTVi's ownership of said subject matter. Beatnik further
acknowledges the validity of the Xxxx and of MTVi's other trademarks and
Content, and agrees not to institute or participate in any proceedings which
challenge the validity of such Xxxx and/or other trademark and Content, or of
MTVi's ownership thereof.
3. Beatnik will not use the Xxxx to disparage MTVi, its products or
services, or promotional goods or for products which, in MTVi's reasonable
judgment, may diminish or otherwise damage MTVi's goodwill in the Xxxx,
including but not limited to uses which could be deemed to be obscene,
pornographic, excessively violent, or otherwise in poor taste or unlawful, or
which purpose is to encourage unlawful activities. Beatnik will not imitate the
Xxxx in any of Beatnik materials, including advertising, product packaging, and
promotional materials and press materials. Beatnik will use only MTVi's
authorized electronic artwork of the Xxxx as a link to the Site or for permitted
advertising and marking under this Agreement. The Xxxx must
always be an active link to xxxx://xxx.xxx.xxx., xxxx://xxx.xx0.xxx or
xxxx://xxx.xxxxxxxx.xxx, as applicable.
4. Beatnik shall obtain written consent for any advertising, promotions
and press releases using MTVi's Xxxx. MTVi shall use all reasonable efforts to
provide approval/comments on any submitted advertising and promotions within
three (3) business days or in less time as the circumstances reasonably warrant.
SCHEDULE E
----------
Milestone Events
FIRST ANNIVERSARY MILESTONES
1. MTVi will use commercially reasonable efforts to promote one Featured
Application on XXX.xxx per each 30 day period following Beatnik's delivery
under Section 2.1(b) (7 days per such 30 day period XXX.xxx home-page and 3
days per such 30 day period 1 click below).
. Validated by MTVi Research Staff Reports and screen grabs.
2. MTVi will (a) offer the Mixman Studio product for sale on at least one MTVi
Affiliate Site or the MTVi branded download area hosted on a third party
site and, (b) approve the use of an MTVi logo on at least one in-store co-
branded product which may consist of a hardware, content (such as featured
artist D*plates), or software product.
. Validated by screen grabs and product.
3. MTVi shall deliver at least 2 million Impressions per month in the
aggregate.
. Validated by MTVi Research Staff Reports.
4. MTVi will incorporate Beatnik QuickClips in the "Emerging Artists" area of
an MTVi Affiliate Site.
. Validated by the appearance of at least three Beatnik QuickClips.
5. At least one press release that involves Beatnik per quarter shall be
released by MTVi.
. Validated by publicly available press releases.
6. MTVi will use commercially reasonable efforts to provide a joint web
collaboration and event promotion mentioning Beatnik (e.g., Campus Tours,
Spring Break).
. Validated by collateral marketing materials.
7. MTVi will use commercially reasonable efforts to make introductions on
behalf of Beatnik to sister Viacom divisions of MTVi (i.e. Paramount Digital
Entertainment, Nickelodeon Online, Blockbuster).
. Validated by introductory meetings with at least two additional
Viacom online divisions -- staff at the Vice President or above level.
EIGHTEEN MONTH MILESTONE
1. MTVi will continue (i) to use commercially reasonable efforts to promote one
Featured Application per each 30 day period following Beatnik's delivery
under Section 2.1(b) on XXX.xxx (7 days per each 30 day period XXX.xxx home-
page and 3 days per such 30 day period 1 click below, and (ii) MTVi will
continue to incorporate three (3) Beatnik QuickClips in the "Emerging
Artists" area of an MTVi Affiliate Site.
. Clause (i) validated by MTVi Research Staff Reports and screen grabs.
. Clause (ii) validated by the appearance of at least three Beatnik Quick
Clips.