Righthaven LLC v. Democratic Underground, LLC et al

Filing 96

DECLARATION of CLIFFORD C. WEBB In Support of Defendant Democratic Underground, LLC's First Motion to Compel the Production of Documents re 95 First MOTION to Compel the Production of Documents By Defendant Democratic Underground, LLC and Memorandum of Points and Authorities In Support Thereof ; filed by Defendants David Allen, Democratic Underground, LLC. (Attachments: # 1 Exhibit A, # 2 Exhibit B, # 3 Exhibit C, # 4 Exhibit D, # 5 Exhibit E, # 6 Exhibit F, # 7 Exhibit G, # 8 Exhibit H, # 9 Exhibit I, # 10 Exhibit J, # 11 Exhibit K, # 12 Exhibit L, # 13 Exhibit M, # 14 Exhibit N, # 15 Exhibit O, # 16 Exhibit P, # 17 Exhibit Q, # 18 Exhibit R, # 19 Exhibit S, # 20 Exhibit T, # 21 Exhibit U, # 22 Exhibit V, # 23 Exhibit W, # 24 Exhibit X, # 25 Exhibit Y, # 26 Exhibit Z, # 27 Exhibit AA, # 28 Exhibit BB, # 29 Exhibit CC, # 30 Exhibit DD, # 31 Exhibit EE, # 32 Exhibit FF)(Webb, Cliff)

EXHIBIT A

Case 2:10-cv-01356-RLH -GWF Document 79-1

Filed 03/09/11 Page 6 of 22

STRATEGIC ALLIANCE AGREEMENT
This STRATEGIC ALLIANCE AGREEMENT (this "Agreement'') is made and
entered into this 18th day of January, 2010 ("Effective Date") by and between Righthaven LLC, a
Nevada limited-liability company ("Righthav?n") and Stephens Media LLC, a Nevada limited-,
liability company ("Stephens Media").

In consideration of the covenants, representations and warranties set forth herein and
other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Righthaven and Stephens Media agree as follows:

1.

Definitions and Interpretations.

1.1.
Certain terms used herein shall have the meaning ascribed to such terms as set
forth in Schedule 1.
1.2.
All of the defined terms as set forth in Schedule 1, if defined in the singular or
present tense, shall also retain such general meaning if used in the plural or past tense, and if
used in the plural or past tense, shall retain the general meaning if used in the singular or present
tense.
1.3.
Section headings are used for convenience only and shall have no interpretive
effect or impact whatsoever.
I
I' '

2.

Integrated Transaction.

I

The Parties hereby covenant that this Agreement is part of an integrated transaction with
the transaction (the "Righthaven Transaction") represented by the formation of Righthaven and
the corresponding Operating Agreement by and amongst Net Sortie Systems, LLC, a Nevada
limited-liability company ("Net Sortie"), Righthaven and the Stephens Media's affiliated
company, SI Content Monitor LLC, an Arkansas limited-liability company (said latter entity
known herein as the "Stephens Media Affiliate" and said Operating Agreement known herein as
the "Operating Agreement"). Stephens Media further covenants, represents and warrants that:
(a) the Stephens Media Affiliate'is presently and shall throughout the Term be Controlled by
common owners, with no material variation in said ownership, (b) the Operating Agreement is'
being executed by the parties to the Operating Agreement simultaneously with the execution by
the Parties of this Agreement; (c) that neither Righthaven nor Net Sortie would enter into the
Righthaven Transaction if not for Stephens Media's execution of this Agreement; and
(d) Righthaven and Net Sortie, as third party beneficiaries, are relying upon Stephens Media's
continued performance of Stephens Media's duties and obligations pursuant to and arising out of
this Agreement as a basis of the consideration for Righthaven's and Net Sortie's respective duties
and obligations pursuant to and arising out of the Operating Agreement.

1

Confidential Attorneys Eyes Only

SM000078

Case 2:10-cv-01356-RLH -GWF Document 79-1

3.

Filed 03/09/11 Page 7 of 22

Exclusive Engagement.

3.1.
Stephens Media shall assign (at the times stated) to Righthaven, pursuant to the
procedures set forth in Section 7: (a) any copyrights owned by Stephens Media that Stephens
Media desires to be the subject of Searching (the "Searching Decision"), with each such
respective assignment to occur within a reasonable time after Stephens Media makes each
respective Searching Decision, (b) any copyrights owned by Stephens Media that Stephens
Media considers (the "Material Risk Conclusion") a material risk ofinfringement (with each
such respective assignment to occur within thirty (30) days after Stephens Media makes each
respective Material Risk Conclusion, and (c) within thirty (30) days of having respective
Infringement Notice, each and every Infringed Copyright that exist during the Term (the
"Assigned Infringed Copyright(s)").
3.2.
During the Term, Righthaven shall use commercially reasonable efforts to engage
in Searching with respect to all Stephens Media Assigned Copyrights.
3.3.
During the Term, Righthaven shall have the right, but not the obligation, to pursue
an Infringement Action of the respective infringements that are the subject of the respective
Infringed Copyrights. Righthaven shall have sixty (60) days after each respective assignment of
each respective Assigned Infringed Copyright to Notify Stephens Media of whether Righthaven
will pursue an Infringement Action of said respective Assigned Infringed Copyright (the
"Remediation Option Notice"). If Righthaven chooses in the Remediation Option Notice to not
pursue an Infringement Action (the "Remediation Declination"), then Righthaven shall reassign
the Assigned Copyright to Stephens Media that is the subject of the Remediation Declination;
provided, however, that Stephens Media shall have the right to reassign any such copyright
pursuant to Section 2.1 upon learning new information concerning the circumstances of
infringement or possible infringement associated with any copyright that is the subject of a
Remediation Declination. If Righthaven chooses in the Remediation Option Notice to pursue an
Infringement Action, then Righthaven shall commence Remediation within the times frames and
pursuant to the procedures set forth in Section 4. Notwithstanding any other provision of this
Agreement, Stephens Media shall have the right to Notify Righthaven, within five (5) Business
Days after receipt of a respective Remediation Option Notice, that Righthaven should not take
any Infringement Action with respect to a particular putative infringer as indicated in any
respective Remediation Option Notice (the "Declination Notice") and upon receipt of a
Declination Notice, Righthaven shall not take any Infringement Action with respect to the
partiCUlar putative infringer set forth in any Declination Notice; provided, however, that Stephens
Media shall only send any Declination Notice on a reasonable basis with the grounds of
reasonability being that a particular putative infringer is a charitable organization, is likely
without fmancial resources, is affiliated with Stephens Media directly or indirectly, is a present or
likely future valued business relationship of Stephens Media or otherwise would be a Person that,
if the subject of an Infringement Action, would result in an adverse result to Stephens Media.
3.4.
While Stephens Media shall reserve the right to undertake litigation in order to
pursue any infringement of any Stephens Media copyright through legal counsel duly licensed in

2

Confidential Attorneys Eyes Only

SM000079

Case 2:10-cv-01356-RLH -GWF Document 79-1

Filed 03/09/11 Page 8 of 22

the jurisdiction through which such litigation would be undertaken, Stephens Media hereby
engages Righthaven throughout the Term on an exclusive basis to undertake all activities set
forth in this Section 3, including, without limitation, the engaging in Searching as well as the
pursuit of Infringement Actions. Stephens Media shall not, at any time during the Term, assign
to any other Person that is a Competitor any copyrights owned by Stephens Media. Stephens
Media shall also never Compete with Righthaven at any time during the Term and for a period of
five (5) years after termination of the Term.

4.

Actions to Address Copyright Infringement

Righthaven shall take an Infringement Action against the Infringer in order to effect a
Disposition within one (1) year of the later of (a) the procurement of a copyright registration
covering the Stephens Media Assigned Copyrights or (b) if such registration already exists,
within six (6) months after each respective Remediation Option Notice that gives rise to each
respective requirement of an Infringement Action; provided, however, that if Righthaven elects
to contact Infringer prior to any Infringement Action and achieves a commercially reasonable
Recovery, then Righthaven shall not be required to take an Infringement Action (and such
Recovery shall satisfy Righthaven's duties in this Agreement to pursue an Infringement Action);
provided further, that ifRighthaven discovers Content that provides Righthaven with a goodfaith-based belief that the Infringer is not an infringer of the Stephens Media Assigned
Copyrights, then Righthaven shall have no duties to take any Infringement Action or pursue a
Disposition.

5.

Recovery Distribution.

Within one (1) week after receipt of the Recovery, Righthaven shall pay to Stephens
Media a the percentage of the Recovery provided to Righthaven's most preferred customers from
time to time (which is, as of the Effective Date, fifty percent (50%)) minus Costs advanced or
incurred by Righthaven related to, with respect to or arising out of the preparation for, conduct of
and ultimate resolution of the Infringement Action andlor Disposition.

6.

Infringement Action Costs.

Subject to Section 2, Righthaven shall be responsible for all Costs incurred in an
Infringement Action (the "Infringement Action Costs"); provided, however, that Costs shall not
include the salaries or other compensation to Righthaven employees associated with or arising
out of work performed arising out of or in association with this Agreement.

7.

Assignment of Copyright Content; Stephens Media License.

7.1
Subject to the other terms and provisions of this Agreement and throughout the
Term, Stephens Media shall effect the assignments to Righthaven of copyrights as required by
this Agreement (including, without limitation, within the time periods required by this
Agreement) by executing a particularized assignment with respect to each copyright and each
3

Confidential Attorneys Eyes Only

SM000080

Case 2:10-cv-01356-RLH -GWF Document 79-1

Filed 03/09/11 Page 9 of 22

consistent with (and in form and substance the same as) the scope of assigmnent as set forth in
the fonn of copyright assigmnent as embodied in Exhibit 1 (each a "Copyright Assigmnent").
Stephens Media shall provide Notice to Righthaven of each copyright (each a "Notified
Copyright") that is required to be the subject of a Copyright Assigmnent (a "Copyright
Assigmnent Notice") by no later than five (5) Business Days prior to the last day upon which
each respective Copyright Assigmnent is required to be executed by Stephens Media as provided
in Section 3.1. Righthaven shall then provide to Stephens Media a conforming Copyright
Assigmnent for Stephens Media to execute with respect to each Notified Copyright within
three (3) Business Days after receipt of the Copyright Assigmnent Notice.
7.2
Despite any such Copyright Assigmnent, Stephens Media shall retain (and is
hereby granted by Righthaven) an exclusive license to Exploit the Stephens Media Assigned
Copyrights for any lawful purpose whatsoever and Righthaven shall have no right or license to
Exploit or participate in the receipt of royalties from the Exploitation of the Stephens Media
Assigned Copyrights other than the right to proceeds in association with a Recovery. To the
extent that Righthaven's maintenance of rights to pursue infringers of the Stephens Media
Assigned Copyrights in any manner would be deemed to diminish Stephens Media's right to
Exploit the Stephens Media Assigned Copyrights, Righthaven hereby grants an exclusive license
to Stephens Media to the greatest extent permitted by law so that Stephens Media shall have
unfettered and exclusive ability to Exploit the Stephens Media Assigned Copyrights. Righthaven
shall have no Obligation to protect or enforce any Work of Stephens Media that is not Stephens
Media Assigned Copyrights.
8.

Stephens Media's Right of Reversion.

Stephens Media shall have the right at any time to terminate, in good faith, any Copyright
Assigmnent (the "Assignment Termination") and enjoy a right of complete reversion to the
ownership of any copyright that is the subject of a Copyright Assignment; provided, however,
that if Righthaven shall have commenced an action to prosecute an infringer of the Stephens
Media Assigned Copyrights, Stephens Media shall be exclusively responsible for effecting
termination of such action including, without limitation, all Losses associated with any dismissal
with prejudice. In order to effect the termination of the any Copyright Assignment, Stephens
Media shall be required to provide Righthaven with thirty (30) days prior written notice. Within
thirty (30) days after receipt of termination of the any Copyright Assignment, Righthaven shall
commence documentation to effect reassignment of the Stephens Media Assigned Copyrights to
Stephens Media. Upon any Assignment Termination, Stephens Media shall pay to Righthaven
the Infringement Action Costs that would otherwise work an unjust enrichment benefitting
Stephens Media (but under no circumstances shall Infringement Action Costs be less than the
costs of any application for registrations or registrations of copyrights made and/or procured by
Righthaven for the benefit of Stephens Media), pursuant to or arising out of this Agreement. No
termination of any Copyright Assignment shall impair Righthaven's rights to receive sums
related to, with respect to and/or arising out of any Recovery pursuant to or arising out of this
Agreement (the "Early Termination Amounts"), including, without limitation, a reasonable level
of compensation associated with, with respect to, and arising out of, any and all efforts exerted
4

Confidential Attorneys Eyes Only

SM000081

Case 2:10-cv-01356-RLH -GWF Document 79-1

Filed 03/09/11 Page 10 of 22

by Righthaven to Search, fmd, investigate, ascertain, pursue, redress, sue or otherwise file a
claim against any Person with respect to, or otherwise address any copyright infringement
benefitting, whether directly or indirectly, copyright holder, pursuant to or arising out of this
Agreement, as well as all other rights to quantum meruit proceeds that any court of competent
jurisdiction would award under such circumstances. Righthaven shall provide Notice Within
thirty (30) days of any Assignment Termination ofRighthaven's calculation of Early Termination
Amounts. Within ten (10) days of receipt of any Recovery by Stephens Media, Stephens Media
shall pay to Righthaven the Early Termination Amounts or provide Notice to Righthaven of any
contest whereby Stephens Media contends that the Early Termination Amounts Notified by
Righthaven to Stephens Media were inaccurate or unjust and to what extent (the "Contested
AmollIit") the Early Termination Amounts were inaccurate or unjust (the "Stephens Media
Contest"). Within ten (10) days after receiving the Stephens Media Contest (the "Contest
Notification Date"), Righthaven shall have the option: (a) to elect to receive from Stephens
Media within ten (10) days of the Contest Notification Date, the Early Termination Amounts
minus the Contested Amount (the "Settled Amount"), or (b) to Notify Stephens Media that
Stephens Media must pay to Righthaven the Settled Amount within ten (10) days of the Contest
Notification Date, and that Righthaven reserves the right to make a claim that Stephens Media
should pay the full Early Termination Amounts. In the event that Righthaven preserves
Righthaven's right to make a Claim pursuant to Section 5(b), the Parties shall mediate the
dispute associated with the Contested Amount (the "Contest Dispute") within sixty (60) days by:
(x) reasonably choosing a mediator or by employing a JAMS mediator through
http://www.jamsadr.com. (y) mediating the Contest Dispute in Las Vegas, Nevada, and
(z) mediating the Contes~ Dispute in good faith (the "Mediation"). In the event that the
Mediation is not effective in resolving the Contest Dispute within. sixty (60) days of the
commencement of the Mediation, Righthaven shall have the right to bring any and all relevant
Claims for recovery of the Contested Amount, and any amounts accrued by Righthaven in the
Mediation, in any court of competent jurisdiction, in addition to all other rights and remedies
available to Righthaven, whether in law or equity.

9.

Representations, Warranties and Covenants of Stephens Media.

Stephens Media hereby represents, warrants and covenants as of the Effective Date and
throughout the Term:
9.1.
The execution, delivery and performance of this Agreement by Stephens Media
does not and shall not violate any of Stephens Media's organizational documents, any applicable
Law, or any contractual or other obligation of Stephens Media or any order to which Stephens
Media is bound.
9.2.
Stephens Media is the owner of all Stephens Media Assigned Copyrights. The
Stephens Media Assigned Copyrights is free and clear of all liens and Encumbrances. Stephens
Media further represents and warrants that it has the exclusive right to use the Stephens Media
Assigned Copyrights, and has the exclusive right to exclude others from Using the Stephens
Media Assigned Copyrights. Stephens Media further warrants that, as of the Effective Date,

5

Confidential Attorneys Eyes Only

SM000082

Case 2:10-cv-01356-RLH -GWF Document 79-1

Filed 03/09/11 Page 11 of 22

Stephens Media has no knowledge of any third-party Claim that any aspect of Stephens Media's
present or contemplated business operations infringes or will infringe any rights of any third
party in Stephens Media Assigned Copyrights.
Stephens Media shall not sell, grant any Encumbrance on or in or assign, any of
9.3.
Stephens Media Assigned Copyrights to any third Person during the Term absent prior written
approval of Righthaven; provided, however, that Stephens Media may maintain Encumbrances
on Stephens Media Assigned Copyrights as part of an overall funding securitization whereby all
or substantially all of Stephens Media's assets are Encumbered as part of said funding
securitization and Stephens Media Assigned Copyrights are not singled-out as or part of a
particularized group of Encumbered assets.
9.4.
Stephens Media shall not reduce, adjust, settle or compromise any infringement of
Stephens Media Assigned Copyrights except as approved in writing by Righthaven.
Stephens Media shall instruct Stephens Media's general counsel, currently Mark
9.5
A. Hinueber, Esq. (the "General Counsel"), to undertake the necessary and appropriate efforts to
ensure Stephens Media's functional performance of Stephens Media's obligations pursuant to
and arising from this Agreement. Stephens Media shall further instruct the General Counsel to
instruct, by way of internal electronic mail communications (in form and substance the same as
Exhibit 9.5), to all employees of Stephens Media that have awareness of Stephens Media
Content, within ten (10) Business Days after the Effective Date (the "Content Notice Date") and
on every anniversary of the Content Notice Date thereafter during the Term, of the need to
promptly apprise the General Counsel throughout the Term of any Content that any employee
believes may reasonably be the subject of an unauthorized reproduction or pUblication.
9.5.
Stephens Media shall promptly notify Righthaven of any unauthorized
infringement of Stephens Media Assigned Copyrights that reasonably comes to Stephens
Media's attention.
9.6.
Stephens Media shall cooperate fully and candidly with Righthaven with respect
to the Infringement Action and shall take all commercially reasonable actions necessary in order
to effect the terms and provisions of this Agreement.
9.7.
Stephens Media shall provide all Content in whatsoever Media known, or
available, to Stephens Media that may aid Righthaven in the conduct of an Infringement Action,
including, without limitation, privileged or confidential Content in any and all Media; provided,
however, that nothing in this Section 9.7 shall require any waiver of any protections afforded by
reporter shield laws, including, without limitation, as set forth pursuant to Nevada Revised
Statute Section 49.275, as amended from time to time.
Stephens Media shall execute such authorizations as may be required by third
9.8.
Persons in order to release Content in any Media whatsoever to Righthaven to aid Righthaven in
an Infringement Action.
6

Confidential Attorneys Eyes Only

SM000083

Case 2:10-cv-01356-RLH -GWF Document 79-1

Filed 03/09/11 Page 12 of 22

9.9.
Righthaven has not made any express or implied warranties or representations that
the Services provided by Righthaven shall result in any particular amount or level of income to
Stephens Media.
9.10. Stephens Media hereby receives notice that Steven A. Gibson ("Gibson") has an
ownership interest in one of the entities that owns Righthaven, Gibson's interest in Righthaven is
therefore a minority interest and that Gibson is also the owner of Gibson Lowry Burris LLP
("Gibson's Participation").
9 .11. Stephens Media hereby waives any conflict of interest associated with and/or
arising out of Gibson's Participation and that Stephens Media is represented by legal counsel in
Nevada familiar with the rules of professional responsibility in Nevada concerning making an
informed waiver of the conflict of interest hereby waived.
9.12. Gibson is in no manner representing Stephens Media in or with respect to the
negotiation, drafting or entering into this Agreement.

10.

Recovery Instrument.

10.1. Any Recovery Instrument shall be written in a manner as to require the
endorsement ofRighthaven to be properly endorsed prior to any distribution.
10.2. Righthaven is hereby authorized to act as attorney-in-fact for Stephens Media and
to endorse any Recovery Instrument in Stephens Media's name for deposit into Righthaven's
bank account for collection and final distribution pursuant to the terms of this Agreement.
Stephens Media shall deliver any Recovery Instrument received by Stephens Media to
Righthavenfor endorsement and deposit into Righthaven's account.
10.3. If Stephens Media uses, disburses, deposits or takes any other action with respect
to any Recovery Instrument in contravention of this Agreement, the Sums with respect to such
Recovery Instrument shall be deemed held in trust to be distributed pursuant to the terms of this
Agreement.
10.4. If Righthaven uses, disburses, deposits or takes any other action with respect to
any Recovery Instrument in contravention of this Agreement, the Sums with respect to such
Recovery Instrument shall be deemed held in trust to be distributed pursuant to the terms of this
Agreement.

11.

Stephens Media's Potential Liability.

Stephens Media understands and acknowledges that Stephens Media and Righthaven may
be liable for an Infringer's attorneys' fees as required by Law in connection with an Infringement
Action. Stephens Media further understands that a lawsuit brought solely to harass or to coerce a

7

Confidential Attorneys Eyes Only

SM000084

Case 2:10-cv-01356-RLH -GWF Document 79-1

Filed 03/09/11 Page 13 of 22

settlement may result in liability for malicious prosecution or abuse of process. If any Claim
made by an Infringer in an Infringement Action results in Losses, other than Losses described in
Section 8, Righthaven shall be solely liable for such Losses and shall indemnify Stephens Media
from and against any such Losses but only if such Losses do not arise out of a misrepresentation
by Stephens Media or other breach by Stephens Media of a provision of this Agreement.

12.

Disclaimer of all Warranties and Representations.
RIGHTHA VEN DISCLAIMS ALL IMPLIED WARRANTIES ANDIOR

REPRESENTATIONS AND MAKES NO WARRANTIES OR REPRESENTATIONS AS TO
ANY PARTICULAR OUTCOME OF ANY INFRINGEMENT ACTION. Righthaven hereby
represents that Righthaven has no knowledge that any Intellectual Property used or owned by
Righthaven infringes the Intellectual Property owned by any third Person.

13.

Remedy.

RIGHTHA VEN SHALL NOT BE HELD LIABLE TO ANY PARTY ON ACCOUNT OF
OR DUE TO BREACH OF TIDS AGREEMENT IN OR FOR ANy AMOUNT THAT
EXCEEDS, IN THE AGGREGATE, THE LESSER OF: (A) ANY STEPHENS MEDIASIDP
FEES RECEIVED BY RIGHTHA VEN FROM STEPHENS MEDIA WITHIN THE PRIOR SIX
(6) MONTHS AND (B) ONE THOUSAND DOLLARS ($1,000) AND RIGHTHAVENSHALL
NOT BE LIABLE TO STEPHENS MEDIA (NOR TO ANY PERSON CLAIMING ANY
RIGHT, TITLE OR INTEREST DERIVED FROM OR AS SUCCESSOR TO THE STEPHENS
MEDIA'S RIGHT, TITLE AND INTEREST) FOR INCIDENTAL, INDIRECT,
CONSEQUENTIAL OR SPECIAL DAMAGES OF ANY KIND INCLUDING, WITHOUT
LIMITATION, LOST REVENUES OR PROFITS, LOSS OF BUSINESS OR LOSS OF
CONTENT ARISING OUT OF TIDS AGREEMENT, IRRESPECTIVE OF WHETHER THE
PARTY HAS ADVANCE NOTICE OF THE POSSIBILITY OF SUCH DAMAGES.

14.

Indemnification.

Subject to Section 8, Stephens Media shall indemnify and hold Righthaven harmless from
and against all Losses incurred by Righthaven with respect to or arising out of any Claim brought
by any third Person against Righthaven based upon any act or omission (whether directly or
indirectly) by Stephens Media, including, without limitation, any act or omission stemming from
or arising out of this Agreement.

15.

General Provisions.

15.1. If any provision of this Agreement should be held to be void or unenforceable, in
whole or in part, by a court: of competent jurisdiction, then such court shall correct the defect in a
narrowly tailored manner to approximate the manifest intent of the Parties.

8

Confidential Attorneys Eyes Only

SM000085

Case 2:10-cv-01356-RLH -GWF Document 79-1

Filed 03/09/11 Page 14 of 22

15.2. Subject to Section 2, this Agreement represents the entire understanding and
agreement by and between Righthaven and Stephens Media.
15.3. This Agreement and any Dispute shall be interpreted and enforced in accordance
with the laws of the State of Nevada without regard to its conflict of law principles.
15.4. The Parties hereby submit to the non-exclusive personal jurisdiction of the state
and federal courts present in Clark County, Nevada with respect to any Dispute.
15.5. The term of this Agreement (the "Term") shall commence on the Effective Date
and shall end upon the termination of the Operating Agreement.

16.

Non-Solicitation.

During the term of this Agreement and for a period of one (1) year subsequent to the
termination date of this Agreement, neither party shall make any attempt to solicit for
employment any current employee of the other party without the prior written consent of such
party.

17.

Notice.

All notices and other communications hereunder shall only be in writing and shall be
given by: (a).e-mail trapsmission to the other party (to be followed promptly by written
confirmation mailed by certified mail as provided below) and deemed delivered upon
transmission when confirnled as aforesaid and provided written confirmation and receipt is
obtained by the sender; (b) facsimile transmission (to be followed promptly by written
confirmation mailed by certified mail as provided below) and deemed delivered upon
transmission when confirmed as aforesaid and provided written confirmation and receipt is
obtained by the sender; (c) overnight courier and deemed delivered one (1) day after dispatch; or
(d) registered or certified mail, return receipt requested and deemed delivered on the earlier of the
date of the signed receipt for same or three (3) days after posting when addressed as follows:

Ifto Righthaven:
Mr. Steven A. Gibson
Manager
Righthaven LLC
7201 West Lake Mead Boulevard, Suite 580
Las Vegas, Nevada 89128
E-mail: [e-mail]

9

Confidential Attorneys Eyes Only

SM000086

Case 2:10-cv-01356-RLH -GWF Document 79-1

Filed 03/09/11 Page 15 of 22

If to Stephens Media:
Stephens Media LLC
Attn: General Counsel
1111 West Bonanza Road
Las Vegas, Nevada 89106
E-mail: [e-mail]
Facsimile: [phone]
To the extent that no facsimile number is currently provided, a facsimile number will be provided
within five (5) Business Days of obtaining same.
IN WITNESS WHEREOF, each of the undersigned duly execute this Agreement and
represent that each has the authority to legally bind each respective entity.

Righthaven LLC

Stephens Media LLC

~

By:
Name:
Title:
Date:

By:
Name: Steven A. Gibson
Title: Manager
Date: January 18,2010

10

Confidential Attorneys Eyes Only

SM000087

Case 2:10-cv-01356-RLH -GWF Document 79-1

Filed 03/09/11 Page 16 of 22

SCHEDULE 1 - DEFINITIONS
"Agreement" shall mean this Righthaven Standard Content Protection and Stephens Mediaship
Agreement.
"Assigned Infringed Copynght(s)" shall have the meaning ascribed to such term as set forth in
Section 3.1.
"Assignment Termination" shall have the meaning ascribed to such term as set forth in Section 8.
"Business Days" shall mean any day, Monday through Friday, excepting Saturday and Sunday
and also excepting any day on which federal chartered banks situated in Clark County, Nevada
are generally not open for business.
"Claim" shall mean any demand, cause of action or claim of whatsoever nature.
"Compete" shall mean to engage, anywhere in the known universe, in any of the business of
Righthaven or to offer or provide any of the services or products that Righthaven provides as of
the Effective Date, including, without limitation, those services and/or products as described in
this Agreement, or to have any association, partnership or ownership interest in any Person that
engages in any such conduct.
"Competitor" shall mean any Person who engages in ~y activity that would be within the
meaning of the word Compete; provided, however, no law firm shall be deemed to be any such
Person.
"Content" shall mean all material, information, documents, matter, text, data, graphics,
computer-generated displays and interfaces, images, photographs and works of whatsoever
nature, including, without limitation, all compilations of the foregoing and all results and/or
derivations of the expression of the, foregoing.
"Content Notice Date" shall have the meaning ascribed to such term as set forth in Section 9.5.
"Contest Notification Date" shall have the meaning ascribed to such term as set forth in
Section 8.
"Contest Dispute" shall have the meaning ascribed to such term as set forth in Section 8.
"Contested Amount" shall have the meaning ascribed to such term as set forth in Section 8.

11

Confidential Attorneys Eyes Only

SM000088

Case 2:10-cv-01356-RLH -GWF Document 79-1

Filed 03/09/11 Page 17 of 22

"Control" shall mean the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of any Person, or the power to veto major policy
decisions of any such Person, whether through the ownership of voting securities, by contract,
or otherwise.
"Copyright Assignment" shall have the meaning ascribed to such term as set forth in Section 7.1.
"Copyright Assignment Notice" shall have the meaning ascribed to such term as set forth in
Section 7.1.
"Costs" shall mean any and every expenditure (at commercially reasonable rates) made on the
part ofRighthaven with respect to an Infringement Action, including, without limitation,
attorneys' fees to local counsel (not employed by Righthaven) prosecuting such action, court
reporter fees, application and registration fees, expert consultant and witness fees, computer
research fees, private investigator fees, process server fees, courier fees, copy charges, long
distance telephone charges, court filing fees, mailing costs, parking fees, expenses incident to
travel by Righthaven representatives related to the Infringement Action, including air (at coach
rates) and ground transport, lodging, and meals, and other disbursements made in connection
with the Infringement Action.
"Declination Notice" shall have the meaning ascribed to such term as set forth in Section 3.3.
"Develop" shall mean develop, conceive, reduce to practice, create, or otherwise arise out of
efforts in any manner whatsoever and through any means whether. now known or hereafter
developed.
.
"Disposition" shall mean the final disposition of an Infringement Action through settlement,
compromise, judgment and/or the execution and delivery of a Recovery Instrument by an
Infringer with respect to, related to or otherwise associated with the Stephens Media Assigned
Copyrights.
"Dispute" shall mean any controversy or other matter with respect to, or arising out of this
Agreement.
"Early Termination Amounts" shall have the meaning ascribed to such term as set forth in
Section 8.
"Effective Date" shall mean the date first entered in this Agreement.
"Encumbrance" shall mean any security interest, pledge, hypothecation, lien or other
encumbrance of whatsoever nature.
"Exhibit" shall mean any document attached hereto denoted as an exhibit, which by reference
made herein shall be deemed incorporated herein by such reference.

12

Confidential Attorneys Eyes Only

SM000089

Case 2:10-cv-01356-RLH -GWF Document 79-1

Filed 03/09/11 Page 18 of 22

"Exploit" shall mean to use, make, sell, or otherwise exploit in any manner whatsoever (through
any means now known or hereafter Developed).
"General Counsel" shall have the meaning ascribed to such term as set forth in Section 9.5.
"Gibson" shall have the meaning ascribed to such term as set forth in Section 9.10.
"Gibson's Participation" shall have the meaning ascribed to such term as set forth in
Section 9.12.
"Infringement Actions Costs" shall have the meaning ascribed to such term as set forth in
Section 6.
"Intellectual Property" shall mean all foreign, federal, state and common law trademarks, service
marks, patents, copyrights, trade secrets, universal resource locators, domain names, trade
dress, mask works, know how, show how, proprietary information and other intangible asset, as
well as all applications for registration or issuance and registrations and issuances relating
thereto and arising there from.
"Infringed Copyright" shall mean any Stephens Media Content that Stephens Media either has
actual notice is being infringed on a copyright basis or has a bon a fide belief is the subject of
infringement on a copyright basis.
"Infringement Action" shall mean an action commenced in a United States federal district court
against one or more Infringers related to, arising from, or concerning the validity, enforcement,
preservation or enforcement of Stephens Media Assigned Copyrights brought by Righthaven
regardless of whether this Agreement is terminated or any rights or licenses pursuant to or
arising from this Agreement are terminated.
"Infringement Action Costs" shall have the meaning ascribed to such term as set forth in
Section 3.
"Infringer" shall mean a Person presently infringing, or hereafter infringing Stephens Media
Assigned Copyrights.
"Losses" shall mean any and all costs, expenses, fees (including, without limitation, attorneys',
accountants', investigators', witnesses' and professionals' fees), charges, expenditures,
liabilities, damages and other losses of whatsoever nature.
"Material Risk Conclusion" shall have the meaning ascribed to such term as set forth in
Section 3.1.
"Mediation" shall have the meaning ascribed to such term as set forth in Section 8.
13

Confidential Attorneys Eyes Only

SM000090

Case 2:10-cv-01356-RLH -GWF Document 79-1

Filed 03/09/11 Page 19 of 22

"Net Sortie" shall mean Net Sortie Systems, LLC, a Nevada limited-liability company.
"Notice" shall mean to provide notice pursuant to Section 17.
"Notify" shall mean to give Notice.
"Notified Copyright" shall have the meaning ascribed to such term as set forth in Section 7.1.
"Operating Agreement" shall have the meaning ascribed to such term as set forth in Section 2.
"Parties" shall mean both Righthaven and Stephens Media.
"Party" shall mean either Righthaven or Stephens Media.
"Person" shall mean any natural person, corporation, limited liability company, limited
partnership, partnership, trust, association, organization or other entity of whatsoever nature.
"Recovery" shall mean any and all Sums received, transferred to, assigned, conveyed, paid or
otherwise obtained by Stephens Media andlor Righthaven relating to, arising or resulting from
(whether directly or indirectly) a Disposition, including, without limitation, all Sums paid by
way of damages, costs and attorneys fees with respect to or arising from an Infringement
Action.
"Recovery Instrument" shall mean any instrument or any other Content in any Media which
evidences a right, title or interest in and to the Sums with respect to, related to or arising out of
the Recovery.
"Remediation Declination" shall have the meaning ascribed to such term as set forth in
Section 3.3.
"Remediation Option Notice" shall have the meaning ascribed to such term as set forth in
Section 3.3.

"Righthaven" shall mean Righthaven LLC, a Nevada limited~liability company.
"Righthaven Transaction" shall have the meaning ascribed to such term as set forth in Section 2.
"Schedule" shall mean an enumerated schedule all of which shall be deemed attached hereto and
incorporated herein by way of the specific reference or references made in this Agreement.
"Searching" shall mean to employ the then available technology and means in Righthaven's
possession to find the occurrence(s) of relevant copyright infringement.

14

Confidential Attorneys Eyes Only

SM000091

Case 2:10-cv-01356-RLH -GWF Document 79-1

Filed 03/09/11 Page 20 of 22

"Searching Decision" shall have the meaning ascribed to such term as set forth in Section 3.1.
"Section" shall be deemed a reference to an enumerated provision of this Agreement. Section
headings are used for convenience only and shall have no interpretive effect or impact
whatsoever.
"Settled Amount" shall have the meaning ascribed to such term as set forth in Section 8.
"Stephens Media" shall mean Stephens Media LLC, a Nevada limited-liability company.
"Stephens Media Affiliate" shall have the meaning ascribed to such term as set forth in
Section 2.
"Stephens Media Assigned Copyrights" shall mean each copyright assigned by Stephens Media
to Righthaven pursuant to Section 7.
"Stephens Media Contest" shall have the meaning ascribed to such term as set forth in Section 8.
"Sums" shall mean all monies, sums, consideration, receivables, asset and other things (whether
tangible or intangible) of value of whatsoever nature as well as all proceeds of any and/or all of
the foregoing.
"Term" shall have the meaning ascribed to such term as set forth in Section 15,5.
"Work" shall have the meaning defined in the U.S. Copyright Act of 1976, as amended.

15

Confidential Attorneys Eyes Only

SM000092

Case 2:10-cv-01356-RLH -GWF Document 79-1

Filed 03/09/11 Page 21 of 22

EXHIBITl

COPYRIGHT ASSIGNMENT

This Copyright Assignment (the "Assigrunent") is made effective as of
_ _ _ _ _ _ _ (the "Effective Date") by Stephens Media LLC, a Nevada limited-liability
company ("Stephens Media"),
In consideration of monetary commitments and commitments to services to be provided
and/or already provided by Righthaven LLC, a Nevada limited-liability company, ("Righthaven")
to Stephens Media and for other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, Stephens Media hereby transfers, vests and assigns the work
depicted in Exhibit A, attached hereto and incorporated herein by this reference (the "Work"), to
Righthaven, subject to Stephens Media's rights of reversion, all copyrights requisite to have
Righthaven recognized as the copyright owner of the Work for purposes ofRighthaven being
able to claim ownership as well as the right to pursue past, present and future infringements of
the copyright in and to the Work.

IN WITNESS WHEREOF, Stephens Media hereby executes this Assignment on this
_._dayof
,20_,
STEPHENS MEDIA LLC

By: _______________________________
Name:
Title:

--------------------------

-------------------

STATE OF _ _ _ _ _ _ _)

COUNTY OF

)

Subscribed and sworn to before me this ____ day of ________________-', 2010.

Notary Public
My Commission Expires: _ _ _ _ _ _ _ _ _ _ _ __
SEAL

16

Confidential Attorneys Eyes Only

SM000093

Case 2:10-cv-01356-RLH -GWF Document 79-1
·

Filed 03/09/11 Page 22 of 22

~

EXHIBIT 9.5

DUE DILIGENCE NOTICE
"As Stephens Media has decided to reinvigorate the company's efforts to protect the company's
valued copyrights, we ask you to immediately report to the Office of General Counsel via e-mail
any suspected or known unauthorized reproduction or publication of any Stephens Media story,
photograph or other content of any nature by any person or entity at any time."

17

Confidential Attorneys Eyes Only

SM000094