RELEASE AND STOCK GRANT AGREEMENT
This agreement (the "Agreement") is made as of February 29, 2000 (the
"Effective Date") between Vidnet, a division of Entertainment Boulevard,
Inc., a Nevada corporation (the "Company"), and Sony Music, a Group of Sony
Music Entertainment Inc. ("Sony"). Capitalized terms used and not otherwise
defined herein shall have the meanings given to them in the music video
license dated as of February 29, 2000 between the Company and Sony (the
"Music Video License").
1. RELEASE. In consideration of the mutual promises contained in this
Agreement and subject to the provisions of Section 2 and 5 below and to the
accuracy of the representations and warranties contained in Section 3 below,
Sony hereby forever releases and discharges you from any and all claims,
demands, actions, causes of action, suits, sums of money, accounts,
covenants, agreements, contracts, and promises in law or in equity, which
Sony now has against you by reason of the unauthorized uses in and throughout
the United States (the "Unauthorized Uses"), as such Unauthorized Uses are
limited to those described in Exhibit A attached hereto, on the Service,
prior to the date of this Agreement, of the Music Videos and the intellectual
property rights therein (collectively referred to herein as the "Sony
Materials"). (The release described in this paragraph 1 is hereinafter
referred to as a "Release.")
2. TRANSFER OF STOCK. In consideration for the Release, the Company
hereby awards, transfers, and assigns to Sony 678, 685 shares (the "Shares")
of the Company's common stock, par value $0.01 per share (the "Common Stock")
representing three percent (3%) of the total number of shares of capital
stock of Company outstanding on the date hereof on a fully-diluted basis,
after giving effect to the issuance of the Shares hereunder, the conversion,
exercise or exchange of all securities of Company convertible into or
exercisable or exchangeable for shares of Common Stock or other capital stock
of Company, but not including the shares of common stock underlying options
and warrants issued to employees of Company and investors introduced by
Cruttenden Xxxx. Upon receipt by the Company of the fully executed Music
Video License, this Agreement and any other agreement related thereto, the
Company shall issue a duly executed certified evidencing the Shares in the
name of Sony.
3. REPRESENTATIONS AND WARRANTIES OF COMPANY. Company hereby represents
and warrants to Sony as follows:
(a) the authorized capital stock of Company consists of 50,000,000
shares of Common Stock, of which 12,451,500 shares are issued and outstanding
as of the date hereof, and 1,000,000 shares of preferred stock, of which
10,000 shares are designated Series A preferred stock, of which 2,000 shares
are issued and outstanding as of the date hereof, and to date, the Company
has issued non-employee options and warrants representing the right to
purchase up to 9,497,310 shares of the Common Stock;
(b) the Shares are validly issued, fully paid and non-assessable
and are being issued to Sony in compliance with the registration and
qualification requirements of all applicable federal and state securities
laws;
(c) no form of general solicitation or general advertising was
used by Company or its representatives in connection with the offer or sale
of the Shares and, assuming the accuracy of the representation and warranty
made by Sony in Section 4 below, no registration of the Shares pursuant to
the Act or any state securities of "blue sky" laws will be required by the
offer, sale or issuance of the Shares;
(d) the Company is not a party to any agreement which is currently
in effect, or by which Company is currently bound, granting any rights to
any Person which are inconsistent with the rights granted by Company in this
Agreement;
(e) no consents, approvals or authorizations of any Person are
required in connection with the execution, delivery and performance or this
Agreement other than those consents, approvals, and/or authorizations already
obtained by Company, copies of which have been provided to Sony; and
(f) other than the Unauthorized Uses, Sony Materials have not been
used for any other unauthorized uses by the Company.
4. REPRESENTATION AND WARRANTIES OF SONY. Sony hereby represents and
warrants to Company that as of the date hereof, Sony is an "accredited
investor" as defined in Rule 501 promulgated as part of Regulation D under
the Securities Act of 1933, as amended (the "Act"). Sony is not acquiring the
Shares with a view to a distribution or resale of any such securities in
violation of any applicable securities laws.
5. REGISTRATION RIGHTS. With respect to all Shares and any other shares
of Common Stock issued to or acquired by Sony or any affiliate of Sony, after
the date of this Agreement, Sony and its affiliates are hereby granted the
following registration rights:
(a) If during the next two (2) years Company proposes to register
(including for this purpose a registration effected by the Company for
shareholders other than Sony (the "Selling Shareholders")), but excluding a
Form S-8 or Form S-4 registration statement, any of its stock under the Act in
connection with the public offering of such securities for cash, the Company
shall, at such time, promptly give Sony written notice of such registration.
Upon the written request of Sony given within twenty (20) days after mailing
of such notice by the Company in accordance with subparagraph 7(b), the
Company shall, subject to the provisions of subparagraph 5(c) below, cause
to be registered under the Act all the Shares that Sony has requested to be
registered.
(b) In connection with any offering involving an underwriting of
shares of the Company's capital stock, the Company shall not be required
under subparagraph 5(a) to include any of the Shares in such underwriting
unless the holders of the Shares accept the terms of the underwriting as
agreed upon between the Company and the underwriters selected by it (or by
other
persons entitled to select the underwriters), and then only in such quantity
as the underwriters determine in their sole discretion will not jeopardize
the success of the offering by the Company. If the total amount of
securities, including the Shares, requested by the Selling Shareholders to be
included in such offering exceeds the amount of securities sold other than by
the Company that the underwriters determine in their sole discretion is
compatible with the success of the offering, then the Company shall be
required to include in the offering only that number of such securities,
including the Shares, which the underwriters determine in their sole
discretion will not jeopardize the success of the offering (the securities so
included to be apportioned pro rata among the Selling Shareholders according
to the total amount of securities requested to be included therein by each
Selling Shareholder or in such other proportions as shall mutually be agreed
to by such Selling Shareholders).
(c) Without limiting the foregoing, if after the date
hereof Company grants registration rights to any Person that are more
favorable in any material respect to the rights granted to Sony and its
affiliates, Sony and its affiliates shall be entitled to such more favorable
rights.
6. Miscellaneous.
(a) GOVERNING LAW. This Agreement shall be governed and
construed by the laws of the State of New York as applied to agreements made
and performed in New York by residents of the State of New York.
(b) NOTICES. Any notice required or permitted hereunder
shall be given in writing and shall be deemed effectively given upon personal
delivery (including by express courier) or three (3) business days after
deposit in the United States Post Office, by First Class mail with postage
and fees prepaid, addressed to Sony at the address indicated beneath Sony's
signature below and to the Company at the address indicated beneath Company's
signature below or at such other address as such party may designate by ten
(10) days' advance written notice to the other party.
(c) WAIVER. Either party's failure to enforce any
provision or provisions of this Agreement shall not in any way be construed
as a waiver of any such provision or provisions, nor prevent that party
thereafter from enforcing each and every other provision of this Agreement.
The rights granted both parties herein are cumulative and shall not
constitute a waiver of either party's right to assert all other legal
remedies available to it under the circumstances.
(d) ENTIRE AGREEMENT. This Agreement represents the
entire agreement between the parties with respect to the Release and the
transfer of Common Stock to Sony, may be modified or amended only in writing
signed by both parties, and satisfies all of the Company's obligations to
Sony with regard to the issuance or sale of securities.
(e) COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be an original and all of which
together shall constitute one instrument.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
VIDENT, A DIVISION OF
ENTERTAINMENT BOULEVARD, INC.
By: /s/ [ILLEGIBLE]
---------------------------------------
Name:
Title:
Address: 00000 Xxxxxx Xxxxxxxxx, Xxxxx X
Xxx Xxxxxxx, XX 00000
SONY MUSIC, A GROUP OF SONY
MUSIC ENTERTAINMENT INC.
By: /s/ Xxx Xxxxxx
---------------------------------------
Name: Xxx Xxxxxx
Senior Vice President
Title: Business Affairs and Administration
Address: 000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
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EXHIBIT A
LABEL ARTIST(s) TITLE
Columbia Ricochet Blink Of An Eye
Columbia Nashville Xxxxx Xxxx Behind The Scenes
Columbia Records Xxxxx Xxxx A Bitter End
Columbia/DKC Xxxx Xxxxx Tore From the Floor Up
Loud Records Xxxxxxxxxx Xxxx (feat. Xxxxx Xxxxx) Relax & Party
Loud Records Big Punisher f. Xxx Xxx Twinz (Deep Cover 98)
Loud Records Xxxxxxxxxx Xxxx f. Raekwon, Method American Cream Team
Man, Inspekta Deck, Kiullah Sin &
Harlem Hoods
Loud Records Xxxxxxxxxx Xxxx f. Khadejia, Product Here We Go
& Wyclef
Loud Records Xzibit What U See Is What U Get
Loud Records Wu All-Stars Soul In The Hole
Loud Records Xxxx Rock feat. Loose Ends Take Your Time
Loud Records/Interscopes Records Mobb Deep (feat. Big Xxxx & Hoodlum
Rakim)
Loud Records/Interscopes records Xxxxxx (feat. Raekwon) So Good
Loud Records/RCA Xxxxxx Xxxxxxxx Xxxxx
Loud Records/RCA Xxxxxx Xxxxxxxx DJ Keep Playing
Loud Records/RCA Delinquent Habits Here Comes The Horns
Loud Records/RCA The Alkoholiks Hip Hop Drunkies
Loud Records/RCA Big Punisher I'm Not A Player
Loud Records/RCA Xx-Xxxx Clan It's Yourz
Loud Records/RCA Xxxxxxx Xxxxx Love Is All Around
Loud Records/RCA Dead Prez These Are The Times
Loud Records/RCA Xx-Xxxx Clan Triumph
5
Loud Records/RCA Cocoa Brovaz Won On Won
Loud Records/RCA Xxxxxx Come Over To My Place
Loud Records/RCA Big Punisher (feat. Xxx) Still Not A Player
Loud Records/RCA Xx-Xxxx Clan C.R.E.A.M.
Loud Records/RCA Xx-Xxxx Clan Can It Be All So Simple
Loud Records/RCA Raekwon Criminology
Loud Records/RCA Xx-Xxxx Clan Da Mystery of Chessboxin'
Loud Records/RCA Raekwon Glaciers of Ice
Loud Records/RCA Raekwon (feat. Ghost Face Killer) Heaven and Hell
Loud Records/RCA Raekwon Ice Cream
Loud Records/RCA Raekwon Incarcerated Scarface
Loud Records/RCA Xx-Xxxx Clan Xxxxxx Xxx
Loud Records/RCA Xx-Xxxx Clan Protect Ya Neck
Loud Records/RCA Xx-Xxxx Clan Reunited
Loud Records/RCA Xx-Xxxx Clan Xx-Xxxx Clan Ain't Nuthin' To F**k
Wit
Relativity Records Crime Boss Please Stop
Relativity Records Beatnuts Do You Believe
Relativity Records Tela Tired of Bawlin'
Relativity Records Bone Thugs-n-Harmony Look Into My Eyes
Relativity Records II True Ballers Flossin'
Relativity Records Common Reminding Me
Relativity Records No I.D. Sky's The Limit
Relativity Records Common Invocation/Hungry
Relativity Records M.O.P. Handle UR Bizness
Relativity Records Three 6 Mafia Tear The Club Up '97
6
Relativity Records Xxx Skeemask 2 Wild For The World
Relativity Records Fatal Everyday
Relativity Records Three 6 Mafia Late Nite Tip
Relativity Records Naughty By Nature Work
Relativity Records Mo Thugs Feat. Xxxxxxx & Krayzie All Good
Bone
Relativity Records H-Town Natural Woman
Relativity Records Link feat. Delite Whatcha Gone Do
Relativity Records M.O.P. Feat. Xxx-Z 4 Alarm Blaze
Relativity Records M.O.P. Feat. Gangsta Boo Remember Me Ballin'
Relativity Records Indo G Feat. Mos' Def Travellin' Man
Relativity Records Mo Thugs feat. Bone Thugs- Ghetto Cowboy
NHarmony
Relativity Records Three 6 Mafia Hit 'Em
Relativity Records Gangsta Boo Where Dem Dollaz At
Relativity Records Link I really Wanna Sex Your Body
Relativity Records Bizzy Bone Thugz Cry
Relativity Records MAG feat. Gangsta Boo How You Like It
Relativity Records Bizzy Bone Nobody Can Stop Me
Relativity Records Infamous Syndicate Here I Go
Relativity Records Tear Da Club Up Thugs Push 'Em Off
Relativity Records Bootleg feat. MC Breed No Future
Relativity Records Krayzie Bone Thug Mentality
Relativity Records Tear Da Club Up Thugs Hypnotized/Cash Money
Relativity Records Link I Don't Wanna See
Relativity Records The Beatnuts Off The Books
Relativity Records The Beatnuts Watch Out Now
7
Relativity Records DJ Honda On The Mic
Relativity Records Poetic Hustlaz Day & Night
Relativity Records Kid Frost What's Your Name
Sony Classical/Columbia Xxxx Xxxxxxx and Xxxx Xxxxx I Want To Spend My Lifetime Loving
You
Sony Records Xxx Xxxxxxx Somebody's Out There Watching
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