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EXHIBIT 10.29
***TEXT OMITTED AND FILED SEPARATELY
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. SECTIONS 200.80(B)(4),
200.83 AND 240.24B-2
MP3.com, Inc.
4790 Eastgate Mall
San Diego, CA 92121
July 26, 2000
Virgin Holdings, Inc.
c/o EMI Recorded Music
1750 North Vine Street
Los Angeles, CA 90028
Gentlepersons:
This agreement (this "Agreement") sets forth the terms and conditions of
the agreement between Virgin Holdings, Inc. ("Virgin" and, together with the
Label Affiliates (as defined below), the "Company") and MP3.com, Inc. (together
with its Affiliates, "MP3") with respect the matters set forth herein.
1. DEFINITIONS:
(a) [...***...]
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(b) "Affiliate" has the meaning assigned to that term under Rule 501
of the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder [...***...].
(c) "Artist" means a recording artist whose performance is embodied
in the Company Recordings.
(d) "Beam-it System" [...***...]
(e) "Company Album" [...***...]
(f) "Company Master" [...***...]
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(g) "Company Recordings" [...***...]
(h) "Company Shelf" [...***...]
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(i) "Download" or "Downloading" [...***...]
(j) "Enforcement Technology" [...***...]
(k) [...***...]
(l) "Instant Listening System" [...***...]
(m) "Internet" means the publicly available network of computer
networks using the Transmission Control Protocol/Internet
Protocol (TCP/IP) (including subsequent extensions or
modifications thereof) commonly referred to as the Internet and
also known as the "World Wide Web," from which digital data
(e.g., text, information, graphics, audio, video or a combination
thereof) may be transmitted from a distant location from or to
electronic devices (e.g., computers (mainframe, desktop, laptop,
handheld, etc.), set-top boxes, cable modems, handheld devices,
cell phones, televisions, etc.) capable of transmitting or
receiving digital data or digital
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information, irrespective of whether a fee is charged or a
subscription or membership is required in order to access such
network. [...***...]
(n) "Label Affiliates" [...***...]
(o) "Locker" [...***...]
(p) "Locker Owner" means an individual Person who shall have
established a particular Locker.
(q) "MP3 Website" [...***...]
(r) "MyMP3" [...***...]
(s) "Own," "Owned" or "Ownership" [...***...]
(t) "Password" means a password either (i) provided to a Locker Owner
by MP3 or (ii) chosen by the Locker Owner and accepted by MP3 so
that
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MP3 is able to identify the Locker Owner. Each Password will be
unique to the individual Locker Owner.
(u) "Person" means any individual, corporation, partnership or other
legal entity.
(v) "Record" means any and all forms of reproductions of audio
recordings (e.g., albums, singles, etc.), now or hereafter
invented, manufactured or distributed primarily for non-public
use, including, without limitation, home use, school use, juke
box use, or use in means of transportation including both
physical and digitized reproductions; provided, that the
applicable Recording embodied in a Record shall in all events
have been commercially released in the form of a physical
phonorecord for sale to consumers.
(w) "Recording" means a sound recording embodied in a Record.
(x) "Record Labels" [...***...]
(y) "Record Payments" [...***...]
(z) "Stream" [...***...]
(aa) "Territory" [...***...]
(ab) "Title List(s)" [...***...]
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2. LICENSE:
(a) Upon the terms and subject to the conditions, restrictions and
limitations set forth herein, and solely to the extent of the
Company's rights with respect thereto, the Company hereby grants
to MP3 a non-exclusive, non-transferable license, without the
right to sublicense, solely during the Term (as defined below)
and within the Territory:
(i) To encode the Company Recordings in a secure Streaming
format using technologies selected by MP3 (which, if
modified or changed from the technologies used by MP3 on
the date hereof, shall be subject to the approval of the
Company, such approval not to be unreasonably withheld)
reasonably necessary to create a database of Recordings
which Locker Owners can access only in accordance with
the methods described in Sections 2(b)-(d) below and
otherwise on the terms and subject to the conditions of
this Agreement, to Stream such encoded Company
Recordings from the MP3 Servers (as defined below) to
Locker Owners via the Internet and to make copies of
such Company Recordings solely to the extent necessary
to exercise its rights under this Section 2(a)(i);
provided, that all such copies shall reside only on the
network servers, mirror sites, caching servers,
workstations or equivalent devices under the direct
control of MP3 dedicated to MyMP3 (the "MP3 Servers");
(ii) To encode and display on the MP3 Website solely for
informational purposes as part of the MyMP3 service
(i.e., not made available for copying or other
reproduction by Locker Owners), cover artwork associated
with the Company Recordings (except for any Company
Recordings that are soundtrack albums, unless the
Company has the unrestricted right to authorize such
use); provided, that no cover artwork shall be encoded
by MP3 at a quality in excess of seventy-two (72) dots
per inch; and provided further, that all copies of such
cover artwork shall reside only on the MP3 Servers;
(iii) To use on the MP3 Website the names and tradenames of
the Company (only as such names and tradenames appear on
the Company Recordings), the titles of the Company
Recordings and the names of the Artists whose
performances are embodied in the Company Recordings (or
a producer or other performer who is credited by the
Company with such Company Recording), in all cases
solely to identify the Company Recordings on the MyMP3
service (and not in connection with any promotion,
marketing
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and/or advertising of MyMP3, MP3, the MP3 Website or for
any other purpose whatsoever without Virgin's prior
written approval); and
(iv) In each instance where Virgin has consented in writing
to such use (in all cases prior to the time of such
use), to use on the MP3 Website the likenesses (other
than cover artwork, which is covered by Section
2(a)(iii) above) of the Artists whose performances are
embodied in the Company Recordings (and any producer or
other performer associated with such Company Recording,
to the extent the Company has the right to authorize
such use) solely as part of the MyMP3 service (and not
in connection with any promotion, marketing and/or
advertising of MyMP3, MP3, the MP3 Website or for any
other purpose whatsoever).
(b) The Company Recordings may be added to or inserted in an
individual Locker:
(i) At the direction of a Locker Owner using the Instant
Listening System (or any Equivalent System (as defined
below) established by MP3);
(ii) At the direction of a Locker Owner using the Beam-it
System (or any Equivalent System established by MP3);
(iii) [...***...]
(iv) [...***...]
[...***...]
(c) [...***...]
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(d) [...***...]
3. LIMITATIONS:
(a) The rights granted by Virgin hereunder are limited to the
non-exclusive use of the Company Recordings in the manner
expressly described in Section 2. Any and all other rights in
connection with the Company Recordings are specifically reserved
by the Company. MP3 shall not sublicense, assign or convey to any
Person, or pledge, mortgage or encumber any rights under this
Agreement.
(b) [...***...]
(c) [...***...]
(d) [...***...]
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(e) [...***...]
4. TERM AND TERRITORY:
(a) The term (the "Term") of this Agreement shall commence upon
execution hereof and shall continue [...***...]
(b) [...***...]
(c) [...***...]
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5. CONSIDERATION: In consideration of this Agreement, MP3 shall pay to the
Company the following:
(a) Upon execution of this Agreement, [...***...]
(b) [...***...]
(c) [...***...]
(d) [...***...]
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6. COMPANY SHELF AND USAGE DATA:
(a) [...***...]
(b) [...***...]
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(c) [...***...]
7. ACCOUNTINGS:
(a) MP3 shall maintain full, true and accurate accounts with respect
to the Royalty Fees and the Per Master Fees and shall compute the
sums due to the Company under Sections 5(b) and (c) as of each
March 31, June 30, September 30 and December 31 after the date
hereof. Within thirty (30) days after each calendar quarterly
period, MP3 will send the Company a statement relating to such
quarter that includes [...***...] (the "Quarterly Statement"),
together with payment of all sums due to the Company. MP3 shall
send such Quarterly Statements to the Company regardless of
whether any amounts are due to the Company. Quarterly Statements
shall be delivered in a computer readable format specified by
Virgin in its reasonable, good faith business discretion.
(b) MP3 will maintain (for at least 5 years after the end of the
Term) books and records with respect to sums payable to the
Company hereunder. The Company may, at its own expense no more
than once per calendar year, examine and copy those books and
records, as provided in this paragraph. In the event that the
calculation of such sums is determined by a computer-based
system, the Company shall be permitted to examine the machine
sensible data utilized by such system and the related
documentation describing such system. The Company may make those
examinations only during MP3's usual business hours, and at the
place where it keeps the books and records. Such books and
records shall be kept at the MP3 office in San Diego, California,
unless otherwise notified. The Company will be required to notify
MP3 at least ten (10) days before the date of planned
examination. If any audit reveals any statement hereunder to be
in error by more than ten percent (10%), in addition to payment
of the deficiency, the reasonable costs and expenses of such
inspection shall be borne by MP3.
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8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
(a) In addition to the other representations, warranties, agreements
and obligations of MP3 herein:
(i) [...***...]
(ii) [...***...]
(iii) [...***...]
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(iv) [...***...]
(v) [...***...]
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(vi) [...***...]
(vii) [...***...]
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(viii) [...***...]
(ix) [...***...]
(b) The Company shall be solely responsible for any Record Payments
that may be due in connection with the use of the Company
Recordings contemplated hereunder.
(c) Each party to this Agreement represents and warrants to the other
that (i) such party has the right, power and authority to enter
into and fully perform this Agreement and (ii) the execution of
this Agreement by such party and its performance of the
obligations hereunder do not and will not violate any agreement
by which such party is bound.
9. OWNED PROPERTY: MP3 hereby acknowledges that all sound recording
copyrights or equivalent state law rights in and to the Company Recordings, and
all copyrights in and to the cover artwork, names and tradenames described in
Sections 2(a)(ii) and (iii) (the "Owned Property"), as between the Company and
MP3, are the sole property of the Company. MP3 shall not contest, or assist
others in contesting, the Company's rights or interests in the Owned Property or
the validity of such ownership. MP3 shall include on the MP3 Website, its
products and all other material produced and distributed publicly by MP3 in
accordance with this Agreement, such copyright, trademark and other notices as
the Company may from time to time reasonably require.
10. TERMINATION:
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(a) Either party may terminate this Agreement upon a material breach
of any of the representations, warranties, agreements or
obligations made by the parties in Sections 2(a), 4(b), 5(b),
5(c), 8(a)(ii), 8(a)(vii) and (viii) of this Agreement, which
breach is not cured within thirty (30) days from date of written
notice by the non-breaching party of any such breach.
(b) The Company may terminate this Agreement: (i) if MP3 is dissolved
or liquidated, or becomes bankrupt or otherwise insolvent; (ii)
if MP3 fails to fully comply with Sections 3, 5(a) and 8(a)(iv)
hereof; or (iii) at any time after the sale by MP3 of fifty
percent (50%) or more of its assets, whether by stock sale,
merger, share exchange, asset sale, consolidation or otherwise to
any company engaging in, or which has been sued by the Company
for engaging in, music piracy.
(c) Upon the occurrence of any of the events described in Section
10(b) or the failure of MP3 to cure a material breach within the
cure period as provided in Section 10(a), in addition to such
other rights and remedies which the Company may have at law or
otherwise under this Agreement, the Company shall have the right
to terminate this Agreement and all rights granted hereunder
shall forthwith revert to the Company. Notwithstanding any such
termination, this Section 10 and Sections 13 and 14 shall remain
in full force and effect.
(d) [...***...]
11. INDEMNITY:
(a) Each party hereby agrees to hold harmless, defend and indemnify
the other party (and its Affiliates, directors, officers,
employees and agents) from any and all damages, liabilities,
costs, losses and expenses (including reasonable attorneys' fees)
("Losses") arising out of or connected with any claim, demand,
liability or action brought or claimed by a third party
(collectively referred to as a "Claim") to the extent such Claim
is based upon a breach of any of the warranties, representations,
covenants or obligations of the indemnifying party in this
Agreement or the gross negligence or wilfull misconduct of such
party.
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(b) In claiming any indemnification hereunder, the indemnfied party
shall promptly provide the indemnifying party with written notice
of any Claim which the indemnified party believe it is entitled
to be indemnified pursuant to this Section 11. The indemnifying
party agrees to reimburse the indemnified party, on demand, for
any payment made by the indemnified party at any time with
respect to any Losses to which the foregoing indemnity applies.
The indemnified party may, at its own expense, assist in the
defense and all negotiations relating to a settlement of any such
Claim. Any settlement intended to bind the indemnified party may
not be entered into without the indemnfied party's prior written
consent, which shall not be unreasonably withheld or delayed.
12. NOTICES: All notices hereunder shall be given in writing and shall be
effective when served by personal delivery or upon receipt when sent by
certified mail, return receipt requested, postage prepaid; when sent by
overnight courier service; when sent by facsimile transmission with hard copy
confirmation sent by certified mail; or when sent by e-mail with telephonic
confirmation, in each case to the party at the addresses set forth below (or at
such other addresses hereafter designated by the parties):
If to MP3:
MP3.com, Inc.
4790 Eastgate Mall
San Diego, CA 92121
Attention: Robin Richards
Facsimile: (858) 623-7003
e-mail: [email protected]
with a copy to:
Ziffren, Brittenham, Branca & Fischer LLP
1801 Century Park West
Los Angeles, CA 90067-6405
Attention: Gary Stiffelman, Esq.
Facsimile: (310) 553-7068
e-mail: [email protected]
If to the Company:
Virgin Holdings, Inc.
c/o EMI Recorded Music, New Media Group
1750 N. Vine Street
YV Building
Hollywood, California 90028
Attention: Robyn L. Glaser
Facsimile: (323) 769-4421
e-mail: [email protected]
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with a copy to:
EMI Recorded Music, North America
1290 Avenue of the Americas, 38th Floor
New York, New York 10104
Attention: Alasdair J. McMullan
Facsimile: 212-492-5095
e-mail: [email protected]
or to such other persons or at such other address hereafter designated by the
parties.
13. CONFIDENTIALITY. The terms and conditions of this Agreement are in all
respects confidential, and neither party shall disclose them, directly
or indirectly, to any other person (except to the extent such disclosure
is required by law [...***...]), other than such party's
legal and financial advisors who shall agree to be bound by this
confidentiality agreement. Neither party shall, directly or indirectly,
by any means, disclose, or participate in or contribute to any public
discussion, notice or other publicity concerning, the terms and
conditions of this Agreement. Notwithstanding the foregoing, the parties
agree that a mutually approved press release with respect to this
Agreement shall be issued within a reasonable period after execution
hereof in accordance with Section 14(i) below.
14. MISCELLANEOUS:
(a) This Agreement sets forth the entire understanding of the parties
hereto relating to the subject matter hereof and supersedes all
prior and contemporaneous agreements and understandings, whether
oral or written. This Agreement may be amended, modified,
superseded, canceled, renewed or extended, and the terms hereof
may be waived, only by a written instrument signed by the parties
hereto or, in the case of a waiver, by the party waiving
compliance. All remedies, rights, undertakings and obligations
contained in this agreement shall be cumulative and none of them
shall be in limitation of any other remedy, right, undertaking or
obligation of either party.
(b) The Company may transfer or assign, in whole or in part, this
Agreement (or its rights, interests or obligations hereunder) to
any of its Affiliates or upon a change of ownership of the
Company. MP3 shall not assign its rights hereunder in whole or in
part to any person or entity without the prior written approval
of Virgin. Any such purported assignment shall be null and void.
Subject to the foregoing, this Agreement shall be binding upon
and inure to the benefit of the parties, their permitted assigns
and their respective successors and legal representatives.
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(d) 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. Any
claim arising out of or relating to this Agreement or the
transactions contemplated hereby shall be instituted in the
United States District Court of the Southern District of New York
or, if federal jurisdiction is unavailable, in any state court
located in New York County, State of New York, and each party
agrees not to assert, by way of motion, as a defense or
otherwise, in any such claim, that it is not subject personally
to the jurisdiction of such Court, that the claim is brought in
an inconvenient forum, that the venue of the claim is improper or
that this Agreement of the subject matter hereof may not be
enforced in any such Court.
(e) Except as is specifically provided herein, nothing in this
Agreement is intended to confer on any person not a party hereto
any rights or remedies under this Agreement.
(g) A waiver by either party of any provision of this agreement in
any instance shall not be deemed to waive it for the future.
(i) Other than as required by law, regulation or stock exchange
requirements, and without the consent of the other party, the
parties hereto shall not, and shall cause their respective
Affiliates not to, disclose the existence of this Agreement or
issue or cause the publication of any press release or other
announcement with respect to the transactions contemplated by
this Agreement. If any press release or other announcement is
made in accordance with the foregoing sentence, the content of
such release or other announcement must be mutually agreed by the
parties hereto.
(j) Should any part of this Agreement judicially be declared to be
invalid, unenforceable, or void, the parties agree that the part
or parts of this Agreement so held to be invalid, unenforceable,
or void shall be reformed by the entity having jurisdiction
thereover without further action by the parties hereto and only
to the extent necessary to make such part or parts valid and
enforceable.
(k) Each party is acting as an independent contractor and not as an
agent, partner, or joint venturer with the other party for any
purpose. Except as provided in this Agreement, neither party
shall have any right, power, or authority to act or to create any
obligation, express or implied, on behalf of the other.
(l) The Section headings in this Agreement are used for convenience
only and will not affect the interpretation of any provision.
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(m) 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.
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Please indicate your acceptance of the above terms by signing in the
space indicated below.
Very truly yours,
MP3.COM, INC.
By: /S/ Robin Richards
-------------------------------
Name:
Title: Pres
AGREED AND ACCEPTED:
VIRGIN HOLDINGS, INC.
By: /S/ Signature Illegible
-------------------------------
Name: Name Illegible
Title: Vice President
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EXHIBIT A
[...***...]
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EXHIBIT B
[...***...]
See Attached
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