EXHIBIT 10.1
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WEBCASTING PERFORMANCE LICENSE AGREEMENT
This Webcasting Performance License Agreement ("Agreement"), dated as of
April 26, 1999, is made by and between Recording Industry Association of
America, Inc., with its principal offices at 0000 Xxxxxxxxxxx Xxxxxx, XX,
Xxxxxxxxxx, XX 00000, as the representative of sound recording copyright owners,
and any assignee or designee hereof pursuant to Section 10.9 hereof
("Licensor"), and musicmusicmusic, Inc., with offices at 00 Xxxxx Xx., Xxxx 000,
Xxxxxxxxxx, XX 00000-0000 ("Licensee").
WHEREAS, Licensee operates a Web site that publicly performs sound
recordings by digital transmission;
WHEREAS, Licensee wishes to obtain a license to transmit such recordings on
its Web site;
WHEREAS, Section 114 of the U.S. Copyright Act, as amended by the Digital
Millenium Copyright Act, authorizes voluntary negotiations for determining
reasonable rates and terms for licenses to perform sound recordings;
WHEREAS, Licensee has agreed to pay a royalty and provide certain
additional consideration for such license, and Licensor and Licensee have agreed
upon such consideration and other terms, which are reflected in this Agreement;
NOW, THEREFORE, pursuant to 17 U.S.C. (S) 114(e)-(f), and in consideration
of the mutual promises contained in this Agreement and for other good and
valuable consideration, including the consideration provided by Licensee in
Section 3, the adequacy and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:
Definitions
"Confidential Information" means information prominently marked in writing or
stamped as "Confidential" by Licensee and submitted to Licensor pursuant to
Section 5.1, 5.2, 5.3, 5.4, or 6.1.
"Gross Revenues" means all revenues, including but not limited to all xxxxxxxx
on behalf of, and all payments (including the fair market value of merchandise,
services or any thing or service of value received in lieu of cash consideration
(i.e., trade or barter)) made to, Licensee, or as authorized by Licensee, its
employees, representatives, agents or any other person acting on Licensee's
behalf, and all xxxxxxxx on behalf of, and payments made to, any person,
company, firm or corporation under the same or substantially the same ownership,
management or control as Licensee for:
(a) access to or use of the Web Site or portions thereof, including
online time and other connect time charges, subscriptions,
payments from Internet service providers, and other transactional
charges, including payments for syndicated
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selling and on-line franchising, and commissions from third
parties on such transactions;
(b) advertising (including audio advertisements, visual
advertisements and sponsor "hot links") on the Web Site,
including xxxxxxxx to and payments received from sponsors, less
advertising agency commissions not to exceed 15 percent actually
incurred to a recognized advertising agency not owned or
controlled by Licensee;
(c) the provision of time or space on the Web Site to any other
person, including program suppliers and content providers;
(d) Licensee's proprietary software used to access the Web Site, or
download any aspect thereof;
(e) references to and inclusion of any product or service on the Web
Site, including without limitation marketing of products whose
sales are supported by the Web Site, except where such reference
is made to phonorecords of sound recordings in the Repertory;
(f) net sales of any products and services sold directly by Licensee,
or by any entity controlled by Licensee (i.e., the price paid by
customers, including shipping costs charged to customers, after
deducting (a) the wholesale price for such products and services
and (b) applicable sales taxes and actual shipping costs, but not
deducting other costs that are not directly allocable to
Licensee's costs of sale, including bad debts, credit card
processing fees and service charges), which are supported,
promoted, or facilitated by the Web Site; provided, however, that
"Gross Revenues" shall not include sales by Licensee of any
legitimate physical phonorecords of sound recordings; and
(g) bad debts recovered relating to amounts due under clauses (a)-
(f).
1.3 "License Fee Report" means a report required by Section 5.
1.4 "Minimum Performance Amount" means the sum of $75,000; provided that this
amount will be reduced by 60% for the period between October 28, 1998 and
December 31, 1999, if Licensee's Gross Revenues during that period do not exceed
$500,000.
1.5 "Operating Expenditures" means all of Licensee's expenditures, whether
direct or indirect, made in connection with operation of the Web Site including,
but not limited to, salaries and bonuses, employee training and education,
supplies, lease payments, payments to Internet service providers, payments to
Internet access providers, advertising agency commissions, marketing costs,
equipment costs that are not capitalized, depreciation, software and technology
licenses, editorial content licenses, subscriber acquisition costs, costs in
development and installation of bandwidth, and credit card servicing fees.
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1.6 "Repertory" consists of all copyrighted sound recordings, including sound
recordings created during the term of this Agreement, in which Licensor has or
will have during the term of this Agreement the right to license performances.
1.7 "Sound recordings" means such term as it is defined in 17 U.S.C. (S) 101.
1.8 "Territory" means the United States, its territories, commonwealths and
possessions.
1.9 "Web Site" means the site on the World Wide Web generally known as Radio Moi
with the principal Universal Resource Locator (URL) of xxxx://xxx.xxxxxxxx.xxx,
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and any successor and related Web sites that are part of the same service
(including without limitation xxxx://xxx.xxxxxxxxxxxxxxx.xxx) controlled by
Licensee, which provides access to performances of copyrighted sound recordings.
1.10 "Web Site Transmissions" means all digital audio transmissions to Web Site
Users from or through the Web Site, and does not include digital audio
transmissions made by any other means; provided, however, that Web Site
Transmissions shall not include transmissions to business establishments, as
provided in 17 U.S.C. (S) 114(d)(1)(C)(iv).
1.11 "Web Site Users" means all those who access or receive Web Site
Transmissions or who access the Web Site.
2. Grant of License
2.1 Licensor hereby grants to Licensee, during the term of this Agreement,
subject to the limitations set forth below, without the right to sublicense, a
limited nonexclusive license to perform publicly up to 200,000 individual sound
recordings in the Repertory, within the Territory, by means of Web Site
Transmissions; provided that such transmissions are made in accordance with the
provisions of 17 U.S.C. (S)(S) 114(d)(2)(A) and (C); and provided further that
Licensee complies with 17 U.S.C. (S) 1101 and all of the terms and conditions of
this Agreement.
2.2 Nothing in this Agreement authorizes Licensee, nor does this Agreement
authorize Licensee to grant to any other person or entity (including without
limitation any Web Site User or any operator of another Web site), any right to
reproduce by any means, method or process whatsoever, now known or hereafter
developed, any of the sound recordings in the Repertory, including, but not
limited to, transferring or downloading any such sound recordings to a computer
hard drive, or otherwise copying the sound recording onto any other storage
medium.
2.3 Nothing in this Agreement authorizes Licensee to grant to any person or
entity (including without limitation any Web Site User or any operator of
another Web site) any right to perform publicly, by means of digital
transmission or otherwise, any of the sound recordings in the Repertory.
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2.4 Nothing in this Agreement authorizes Licensee to enter into any arrangements
for accessing Licensee's programming through any other transmitting entity,
including without limitation any other Web site.
2.5 The licenses granted in this Agreement extend only to Licensee and the Web
Site. This Agreement grants no rights to Licensee other than those
expressly granted herein. Without limiting the generality of the foregoing,
this Agreement does not grant to Licensee (a) any copyright interest in any
sound recording; (b) any rights outside the Territory; (c) any trademark
rights; or (d) any rights to any endorsement by Licensor or any other
person.
3. License Fees and Other Consideration
3.1 For each month of the term of this Agreement (counting the period October
28, 1998 to December 1, 1998 as one month), Licensee shall pay Licensor,
for the license granted in Section 2.1, the greater of (a) fifteen (15)
percent of Gross Revenues received during that month or (b) fifteen (15)
percent of Operating Expenditures paid during that month. Licensee shall
also pay, within 30 days after December 31, 1999 and within 30 days after
December 31, 2000, an additional amount equal to (x) the Minimum
Performance Amount, less (y) the aggregate amount paid pursuant to the
preceding sentence during the fourteen and twelve month periods preceding
December 31, 1999, and December 31, 2000, respectively; provided, however,
that no additional amount shall be owed pursuant to this sentence if the
amount (x) is equal to or less than the amount (y).
3.2 Licensee shall submit license fee payments specified in Section 3.1 for the
period covered in the initial License Fee Report provided for in Section 5.1
within twenty days after the date of this Agreement. All other payments
specified in Section 3.1 shall be made on the date the corresponding Monthly
License Fee Report becomes due under Section 5.2.
3.3 If Licensor does not receive the monthly License Fee Report when due,
Licensee shall submit monthly license fee payments that are 20% higher than the
monthly payments due for the preceding month, and payments shall continue at
that increased rate, until Licensor receives the late License Fee Report. If the
amount paid pursuant to this Section 3.3 is less than the amount actually due,
the underpayment shall be subject to Section 3.4. If the amount paid pursuant to
this Section 3.3 is more than the amount actually due, the overpayment shall be
credited against other payments due to Licensor under this Agreement.
3.4 Licensee shall pay a finance charge of 1-1/2% per month, or the maximum rate
permitted by law, whichever is less, from the date due, on any required payment
that is not made on or before its due date, without prejudice to any other
rights Licensor may have in connection with such delinquency.
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3.5 During the term of this Agreement, Licensee shall provide Licensor with time
and reasonably prominent space on the Web Site, at no charge to Licensor or any
other person, for such advertisements and public service announcements as
Licensor shall request in writing; provided that Licensee shall not be required
to provide more than one such advertisement or announcement at any one time.
3.6 During the term of this Agreement, Licensee shall provide direct links, from
the place on the Web Site where artist, album title, and song title information
for each recording is provided, to the Web sites of the copyright owners of such
recordings; provided that the number of such links shall not exceed two per
copyright owner at any one time, and Licensee shall link to Web sites that may
be specified by such copyright owners. In the absence of such instructions from
the sound recording copyright owner, Licensee shall use its best efforts to
determine the appropriate link.
3.7 During the term of this Agreement, Licensee shall provide direct links, from
the place on the Web Site where artist, album title, and song title information
for each recording is provided, to one or more Web sites that provide for direct
sales of substantially all the sound recordings performed by Licensee, except to
the extent such direct sales are conducted directly by Licensee from the Web
Site.
3.8 During the term of this Agreement, Licensee shall cooperate with Licensor in
permitting Licensor to conduct surveys of Web Site Users that are not
unreasonably burdensome to Licensee; provided that Licensor may conduct no
more than one such survey in any twelve month period.
3.9 During the term of this Agreement, Licensee shall provide Licensor with
reports, as Licensor may from time to time request, regarding Web Site Users.
Such reports shall be in the form and contain the information specified in
Licensor's requests. Any such request(s) made by Licensor shall be in writing
and sent to Licensee at least thirty days prior to commencement of the period to
be covered by the report. The reports may include information as to Web Site
Users' names and e-mail addresses (for those Web Site Users who agree to permit
disclosure of their names and e-mail addresses to Licensor and to record
companies); ages; gender; location; type of music listened to; songs listened
to; number of artists and listens; purchases from the Web Site; use of links to
other Web sites; and such other information as Licensor reasonably requests.
3.10 During the term of this Agreement, Licensee shall post an announcement on
the Web Site, in form and substance satisfactory to Licensor, concerning
the license limitations contained in Sections 2.2, 2.3 and 2.4 and, if
requested by Licensor, include a click wrap agreement in form and substance
satisfactory to Licensor, for acknowledgement by Web Site Users.
4. Term
4.1 The term of this Agreement commences on October 28, 1998, and ends on
December 31, 2000, unless earlier terminated pursuant to this Section 4 or
Section 8.
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4.2 Either party may terminate this Agreement as to the other party if, at any
time, such other party shall file in any court or agency pursuant to any statute
or regulation of any state or country, a petition in bankruptcy or insolvency or
for reorganization or for an arrangement or for the appointment of a receiver or
trustee of the party or of its assets, or if such other party proposes a written
agreement of composition or extension of its debts, or if such other party shall
be served with an involuntary petition against it, filed in any insolvency
proceeding, and such petition shall not be dismissed within sixty (60) days
after the filing thereof, or if such other party shall propose or be a party to
any dissolution or liquidation, or if such other party shall make an assignment
for the benefit of creditors.
5. License Fee Reports
5.1 Upon entering into this Agreement, Licensor shall submit an initial License
Fee Report on the report form attached hereto as Exhibit A, with information as
to Gross Revenues received and Operating Expenditures paid in each month during
the period between the Effective Date and the last day of the month preceding
the date of this Agreement. Such License Fee Report shall be certified to be
accurate by an officer of Licensee.
5.2 Licensee shall submit a monthly License Fee Report for each month during the
term of this Agreement, by the twentieth day of the following month, on the
report form attached hereto as Exhibit A with information as to Gross Revenues
received and Operating Expenditures paid during such month. Such License Fee
Report shall be certified to be accurate by an officer of Licensee.
5.3 During the term of this Agreement, Licensee shall provide Licensor with
monthly reports, by the twentieth day of each month, regarding the sound
recordings accessed by Web Site Users during the preceding month. Such reports
shall be in the form set forth in Exhibit B and contain the information
specified by Licensor. Such reports shall include information as to use by
title; artist; album; label; catalogue number; UPC Code (by December 31, 1999);
release date; ISRC code (when available); number of playing dates and times of
transmission; duration of song; and such additional information as Licensor
reasonably requests; provided that such requests shall not be effective in less
than 60 days from the date of the request.
5.4 During the term of this Agreement, Licensee agrees to submit such additional
information as may be required under applicable rules and regulations of
the Copyright Office, including without limitation 37 C.F.R. (S) 201.36.
6. Verification of License Fee Reports and other Reports
6.1 Licensor shall have the right to examine Licensee's books and records, and
Licensee agrees to obtain for Licensor the right to examine the books and
records of any partner in, or co-publisher of, the Web Site, in order to verify
any report required by this Agreement. Licensor may exercise this right no more
than once per calendar year. Licensor shall give Licensee thirty days notice of
its intention to conduct an examination. Licensee agrees to furnish all
pertinent books and records, including electronic records, to Licensor's
authorized representatives, during customary business hours. Such books and
records shall be kept by Licensee in accordance with
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Generally Accepted Accounting Principles and shall be retained for at least
three years following expiration of the term of this Agreement. Notwithstanding
the foregoing, Licensee shall not be required to provide Licensor with the
access provided in this Section 6.1 if in the preceding 12 months the Licensee's
independent auditor has completed and signed an audit report for an audit that
addresses all of the information that would have been requested by and made
available to Licensor, in which event Licensee shall provide to Licensor the
audit report, work papers and other information provided to such auditor.
6.2 Expenses for any examination conducted by Licensor under Section 6.1 shall
be paid by Licensor unless such examination results in a determination by
the auditor conducting such examination that Licensee's actual payments for
the period examined were more than 5 percent below the payments required
under this Agreement, in which case Licensee shall pay the costs of the
audit.
6.3 The exercise by Licensor of any rights under this Section 6 shall not
prejudice any other rights or remedies of Licensor, including any other
rights of Licensor to dispute any amounts owed to Licensor under this
Agreement.
7. Confidentiality
7.1 Licensor shall limit access to Confidential Information to:
(a) Those employees, consultants and agents of Licensor who are not
also employees or officers of a sound recording copyright owner
and who, for the purpose of performing their assigned duties,
during the ordinary course of business, require access to the
Confidential Information;
(b) An independent and qualified auditor who is not an employee or
officer of a sound recording copyright owner, but is authorized
to act on behalf of copyright owners with respect to the
verification of royalty payments; and
(c) Use in any arbitration proceeding under 17 U.S.C. (S) (S) 112 or
114, provided that Licensor shall use its best efforts to obtain
a protective order limiting access to the Confidential
Information to the arbitration panel and counsel for any other
party to such proceeding.
7.2 Licensor shall implement procedures designed to safeguard all Confidential
Information.
7.3 Except as may be required by law, Licensee shall not provide this Agreement,
or disclose any of the terms and rates contained in this Agreement, to any
person or entity without the prior written consent of Licensor.
7.4 Notwithstanding the foregoing, Licensor shall be permitted to disclose
Confidential Information provided pursuant to Section 5.3 to sound
recording copyright owners that agree in writing to maintain the
confidentiality of such information.
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8. Breach or Default
8.1 If Licensee fails to perform any of the terms or conditions required of it
by this Agreement, Licensor may, at Licensor's option, give Licensee notice to
cure Licensee's breach or default. If Licensee does not cure within five days of
any such notice, this Agreement may be terminated by Licensor at the end of that
period, and any further performances shall be fully subject to the copyright
owners' rights under 17 U.S.C. (S) 106(6), and the remedies in 17 U.S.C. (S) 501
et seq., and Licensor's right to terminate under this Section 8 shall be in
addition to any and all other remedies that Licensor may have in law or equity.
No waiver by Licensor of full performance by Licensee in any one or more
instances shall be a waiver of the right to require full and complete
performance of this Agreement thereafter or of the right to terminate this
Agreement in accordance with this Section 8.
9. Notices
All notices and other communications between the parties hereto shall be in
writing and deemed received (i) when delivered in person; (ii) upon confirmed
transmission by telex or facsimile device; or (iii) five days after deposited in
U.S. mails, postage prepaid, certified or registered mail, addressed to the
other party at the address set forth below (or such other address as such other
party may supply by written notice):
Licensor: Xxxxxx Xxxxx
Senior Vice President, Director of Business Affairs
Recording Industry Association of America, Inc.
0000 Xxxxxxxxxxx Xxxxxx, XX
Xxxxx 000
Xxxxxxxxxx, XX 00000
Licensee: Wolfgang Spegg
musicmusicmusic, Inc.
00 Xxxxx Xx., Xxxx 000
Xxxxxxxxxx, XX 00000-0000
10. Miscellaneous
10.1 This Agreement shall be governed by, and construed in accordance with, the
laws of the State of New York (without giving effect to conflicts of law
principles thereof). The parties hereby agree that all actions or proceedings
arising directly or indirectly from or in connection with this Agreement shall,
at the option of either party, be litigated only in the United States District
Court for the District of Columbia located in Washington, DC. The parties
consent to the jurisdiction and venue of the foregoing court and consent that
any process or notice of motion or other application to said court or a judge
thereof may be served inside or outside the District of Columbia by registered
mail, return receipt requested, directed to the party for which it is intended
at its address set forth in this Agreement (and service so made shall be deemed
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complete five days after the same has been posted as aforesaid) or by personal
service or in such other manner as may be permissible under the rules of said
court.
10.2 The remedies provided herein shall be cumulative and shall not preclude
assertion by any party hereto of any other rights or the seeking of any other
remedies against the other party hereto. No failure to exercise and no delay in
exercising any right, power or privilege granted under this Agreement shall
operate as a waiver of such right, power or privilege. No single or partial
exercise of any right, power or privilege granted under this Agreement shall
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege.
10.3 Whenever possible, each provision of this Agreement shall be interpreted in
such a manner as to be effective and valid under applicable law, but if any
provision of this Agreement shall be prohibited by or invalid under applicable
law, such provisions shall be ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement.
10.4 This Agreement may be modified or amended only by a writing signed by
Licensor and Licensee.
10.5 This Agreement expresses the entire understanding of the parties and
supersedes all prior and contemporaneous agreements and undertakings of the
parties with respect to the subject matter hereof.
10.6 Except as otherwise provided in Section 6.2, each party will pay all of its
own expenses, including attorney's fees incurred in connection with the
negotiation of this Agreement, and the performance of its obligations hereunder.
10.7 Licensor and Licensee agree that (a) all obligations of, inter alia,
clearance, payment or attribution to third parties, including music
publishers, union funds and performing rights societies, or as a result
of the exercise of rights licensed hereunder or any activities of
Licensee, shall be solely the responsibility of Licensee, including but
not limited to payment for use of the musical compositions embodied in
sound recordings, and for any liabilities associated with such use, and
(b) Licensee will fully indemnify and hold Licensor harmless for any such
obligations or liabilities, including any claims, liabilities, fees,
damages or losses (including reasonable attorney's fees and court costs),
arising out of such obligations and liabilities.
10.8 This Agreement may be executed in counterparts, each of which shall be
deemed to be an original but which taken together shall constitute one
agreement.
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10.9 Except as otherwise expressly provided herein, this Agreement and the
rights hereunder shall not be assignable or transferable by either party without
the prior written consent of the other party; provided, however, that Recording
Industry Association of America, Inc. may assign its obligations and rights to,
or designate, a collective entity or other entity to perform Licensor's
obligations under this Agreement, in which case such assignee or designee shall
assume all obligations and rights of Licensor under this Agreement.
10.10 This Agreement shall not be construed to create a partnership, joint
venture, agency or other legal relationship between the parties, or to form any
other legal entity.
10.11 The titles used in this Agreement are used for convenience only and are
not to be considered in construing or interpreting this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
RECORDING INDUSTRY ASSOCIATION MUSICMUSICMUSIC, INC.
OF AMERICA, INC.
By: /s/ Xxxxxx Xxxxx By: /s/ Wolfgang Spegg
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Title: Senior V.P., Director of Business Affairs Title: President, CEO and director
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