Sample Business Contracts


Settlement Agreement [Amendment No. 2] - The Harry Fox Agency Inc., MPL Communications Inc., Peer International Corp. and MP3.com Inc.


                    SECOND AMENDMENT TO SETTLEMENT AGREEMENT


               This Amendment, dated as of February 28, 2001 ("Amendment") to
the Amendment to the Settlement Agreement, dated December 28, 2000, which
amended the Settlement Agreement, dated as of October 17, 2000 ("Settlement
Agreement"), is made by and between, on the one hand, The Harry Fox Agency, Inc.
("HFA"), a New York corporation, MPL Communications, Inc. ("MPL") a New York
Corporation, and Peer International Corporation ("Peermusic"), a New Jersey
corporation, and on the other hand, MP3.com, Inc. ("MP3.com"), a Delaware
corporation.

                                    RECITALS


               WHEREAS, the parties hereto (the "Parties") wish to extend the
deadline by which individual HFA publisher principals must approve the
Settlement Agreement, as amended, so that the Parties can maximize the number of
music publishers that participate in the settlement and secure any corresponding
licenses provided therein; and

               WHEREAS, all capitalized terms used herein but not defined shall
have the meanings given to such terms in the Settlement Agreement, as amended.

               NOW, THEREFORE, in consideration of the foregoing and of the
mutual promises, covenants, undertakings, and conditions set forth herein, and
for value received, the sufficiency of which is hereby acknowledged, the Parties
agree to amend the Settlement Agreement as follows:

                                    AGREEMENT


I.      Amendments

        A. Section 1.5 of the Settlement Agreement is hereby amended and
restated in its entirety to read as follows:

               1.5 "Effective Date" shall mean the date that is the earlier of
               (i) March 30, 2001, or (ii) the date on which HFA returns all
               monies due to MP3.com, if any, pursuant to Sections 5.1 and 5.2,
               provided that this Settlement Agreement has not been terminated
               prior to such date pursuant to Sections 5.1(b), 5.2(b), or 9.1.

        B. Section 1.11 of the Settlement Agreement is hereby amended and
restated in its entirety to read as follows:

               1.11 "Response Date" shall mean March 23, 2001.

        C. Section 5.1(a) of the Settlement Agreement is hereby amended and
restated to read as follows:


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               5.1    Settlement Payment

                      (a) Fifteen million dollars ($15,000,000) of the Total
               Payment (the "Settlement Payment") shall be used to settle claims
               against MP3.com pursuant to Section 2 above. In the event that
               HFA does not receive by the Response Date executed endorsements
               of Settlement and License Notice and Authorization forms from all
               of the Relevant HFA Publisher-Principals, HFA will return to
               MP3.com an amount that shall be calculated by multiplying the
               Settlement Payment by the Percent Market Share, and then
               subtracting that figure from the Settlement Payment. HFA shall
               return such amount, if any, with accrued interest, to MP3.com by
               wire transfer on or by March 30, 2001. For purposes of this
               Section only, Percent Market Share shall be calculated by
               determining the percentage of Total Revenues attributable to the
               Settling HFA Publisher-Principals and Additional Settling HFA
               Publisher-Principals combined, and Total Revenues shall be the
               sum of all royalties distributed to Relevant HFA
               Publisher-Principals by HFA over the previous two (2) full
               calendar years (i.e., 1998 and 1999).

        D. Section 5.2(a) of the Settlement Agreement is hereby amended and
restated to read as follows:

               5.2    Advance Payment.

                      (a) Fifteen million dollars ($15,000,000) of the Total
               Payment (the "Advance Payment") shall be used as a recoupable,
               nonrefundable advance to Licensing HFA Publisher-Principals for
               royalties due under licenses issued pursuant to the Governing
               Agreement during the term thereof. In the event that HFA does not
               receive by the Response Date written authorization to issue
               licenses to MP3.com for the use of Copyrighted Works as provided
               in the Governing Agreement, in the form of executed endorsements
               of Settlement and License Notice and Authorization forms or
               License Only Notice and Authorization forms, from all of HFA's
               Publisher-Principals, excluding Universal Music Group and its
               Affiliates, HFA will return to MP3.com an amount that shall be
               calculated by multiplying the Advance Payment by the Percent
               Market Share, and then subtracting that figure from the Advance
               Payment. HFA shall return such amount, if any, with accrued
               interest, to MP3.com by wire transfer on or by March 30, 2001.
               For purposes of this Section only, Percent Market Share shall be
               calculated by determining the percentage of Total Revenues
               attributable to Licensing HFA Publisher-Principals, provided,
               however, that, consistent with Section 5.2(c), should a Licensing
               HFA Publisher-Principal, in accordance with the Settlement and
               License Notice and Authorization or License Only Notice and
               Authorization, choose to license some, but not all, of its
               Copyrighted Works, that Licensing HFA Publisher-Principal's
               revenues will be determined based solely on the revenues
               generated by the Copyrighted Works it has licensed. For purposes
               of this Section only, Total Revenues shall be the sum of all
               royalties distributed to HFA Publisher-Principals, excluding
               Universal Music Group and its Affiliates, by HFA over the
               previous two (2) full calendar years (i.e., 1998 and 1999).


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II. Controlling Document. The provisions of the Settlement Agreement, as
modified by this Amendment and the Amendment dated December 28, 2000, shall
remain in full force and effect. The parties acknowledge that the Letter
Agreement ("Letter Agreement"), dated as of December 4, 2000, as amended,
between MP3.com and HFA, including but not limited to MP3.com's waivers of
Sections 5.1(b) and 5.2(b) of the Settlement Agreement, remains in full force
and effect in its entirety, except that all capitalized terms in the second
paragraph of the Letter Agreement shall have the meaning set forth in the
Settlement Agreement, as modified by this Amendment.

III. Counterparts. This Amendment may be executed in any number of counterparts,
each of which may be executed by less than all of the Parties hereto, and all of
which together shall constitute one instrument. This Amendment may be executed
and delivered by facsimile and the Parties agree that such facsimile execution
and delivery shall have the same force and effect as delivery of an original
document with original signatures, and that each Party may use such facsimile
signatures as evidence of the execution and delivery of this Amendment by all
Parties to the same extent that an original signature could be used.


                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]



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               IN WITNESS WHEREOF, the Parties have caused this Amendment to the
Settlement Agreement to be executed by their duly authorized representatives as
of the date first above written.


                                    THE HARRY FOX AGENCY, INC.


                                    By: /s/ ROBERT SHAW
                                       ----------------------------------
                                    Name: Robert Shaw
                                    Title: COO

                                    MPL COMMUNICATIONS, INC.


                                    By: /s/ unreadable
                                       ----------------------------------
                                    Name:
                                    Title:  Vice President

                                    PEER INTERNATIONAL CORPORATION


                                    By: /s/ RALPH PEER II
                                       ----------------------------------
                                    Name: Ralph Peer
                                    Title: Chairman

                                    MP3.COM, INC.


                                    By: /s/ DERRICK OIEN
                                       ----------------------------------
                                    Name: Derrick Oien
                                    Title:  Chief Operating Officer



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