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Woodstock 50 - Petition for Injunction
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Woodstock 50, LLC's petition for injunction against Dentsu Inc. et al.
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CAUTION: THIS DOCUMENT HAS NOT YET BEEN REVIEWED BY THE COUNTY CLERK. (See below.) INDEX NO.
INDEX NO. UNASSIGNED
NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 05/08/2019
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
--------------------------------------------------------------x
WOODSTOCK 50, LLC, :
: Index No.
Petitioner, :
: VERIFIED PETITION IN SUPPORT
v. : OF APPLICATION FOR
: CPLR § 7502(c) INJUNCTION
: IN AID OF ARBITRATION
DENTSU INC., DENTSU AEGIS :
NETWORK, and AMPLIFI LIVE, LLC :
Respondents. :
Petitioner Woodstock 50, LLC ("W50"), by its attorneys, Kasowitz Benson Torres LLP,
as and for its Verified Petition against Dentsu Inc., Dentsu Aegis Network, and Amplifi Live,
LLC (collectively, "Dentsu"), avers as follows:
1. Petitioner submits this Verified Petition in support of its urgent application
pursuant to CPLR § 7502(c) seeking an Order (i) enjoining Dentsu from violating the terms of
its Financing and Production Agreement with W50 (the "Agreement"), including requiring
Dentsu immediately to return nearly $18 million in misappropriated funds from the
Woodstock 50th Anniversary Festival ("Festival") bank account and provide W50 access to
the funds in the account, which W50 may use solely for Festival-related expenses; and (ii)
enjoining Dentsu from disparaging W50, interfering with its contracts with performers and
others, and undermining the Festival, pending arbitration in New York before the American
Arbitration Association in accordance with the terms of the parties' Agreement, a copy of
which is attached hereto as Exhibit A .
2. W50 seeks this emergency relief as a result of Dentsu's outrageous and illegal
misconduct that threatens enormous and irreparable harm to W50. W50 and Dentsu were,
until last week, partners in the production of the Festival that will take place in mid-August
This is a copy of a pleading filed electronically pursuant to New York State court rules (22 NYCRR §202.5-b(d)(3)(i))
which, at the time of its printout from the court system's electronic website, had not yet been reviewed and
approved by the County Clerk. Because court rules (22 NYCRR §202.5[d]) authorize the County Clerk to reject
filings for various reasons, readers should be aware that documents bearing this legend may not have been
accepted for filing by the County Clerk. 1 of 20
CAUTION: THIS DOCUMENT HAS NOT YET BEEN REVIEWED BY THE COUNTY CLERK. (See below.) INDEX NO. UNASSIGNED
2019, marking the fiftieth anniversary of the iconic and historic music festival originally held
in 1969. In a series of precipitous, underhanded and unauthorized actions, Dentsu purported
to seize control of and oust W50 from the Festival's production, and then immediately
announced through press releases to the world on April 29 that it was unilaterally cancelling
the Festival. Dentsu compounded its egregious conduct by contacting numerous stakeholders
-- including musical talent and their agents, insurers and public officials -- falsely telling them
that they were released from their contracts with W50 and the Festival, and that the
performers should not perform at the Festival, though they have all been paid in full. Dentsu
went so far as to tell those performers and agents that Dentsu will indemnify them for the
losses caused by their terminating their contracts and refusing to perform. Then, in a further
effort to irreparably sabotage W50's ability to produce the Festival, Dentsu stole nearly $18
million in funds from the dedicated Festival bank account.
3. Dentsu's actions have caused a worldwide uproar over its efforts to kill the
Festival's commemoration of one of the most iconic cultural events of the 20th century.
4. In light of Dentsu's wanton and illegal conduct -- including its flagrant breaches
of its Agreement with W50, its theft of Festival funds, and its tortious interference with W50's
contracts with the performers and others -- and given the urgency of completing the
preparations and logistics to produce the Festival which will be held in 3 short months, the
requested relief is critically necessary pending the required arbitration of the disputes between
the parties. Without this relief, any award granted in the arbitration will be ineffectual
because, as described herein, Dentsu has attempted to and continues to sabotage W50's
production of the Festival in plain violation of the Agreement and New York law.
This is a copy of a pleading filed electronically pursuant to2 New York State court rules (22 NYCRR §202.5-b(d)(3)(i))
THIS DISPUTE
5. In just over 100 days, W50 will be staging the Festival commemorating the
fiftieth anniversary of Woodstock, with tens of thousands of concertgoers enjoying more than
75 performers over the course of the 3-day event in Watkins Glen, New York. W50 has been
working for many months together with a wide-ranging cast of musical talent and concert-
staging partners to plan the Festival, which will be a musical and cultural event that will stand
as a spectacular tribute to the original Woodstock festival and its unique place in American
cultural history. Early last week, W50 learned for the first time from press reports that its
financial partner, Dentsu, was purportedly cancelling the Festival -- an action that Dentsu has
no legal right to do.
6. W50 was blindsided by Dentsu's announcement, and shocked and outraged that
Dentsu claimed the right to unilaterally cancel the Festival -- an action that is expressly barred
by its Agreement with W50. Dentsu's sabotage did not stop with its unauthorized and
improper cancellation announcement. Dentsu also pillaged the Festival bank account on its
way out, taking all of the $17.8 million in the account earmarked for Festival production
costs. Each of Dentsu's acts, as detailed below, violated Dentsu's Agreement with W50.
7. Dentsu's sabotage of the Festival continued with Dentsu actively contacting
numerous Festival stakeholders, including producers, performers, and other Festival vendors,
inducing and/or encouraging them to breach their contracts with W50, even though such
performers had been fully paid for their participation in the event and remained obligated to
perform the contracted services.
8. As Dentsu was carrying out its inexplicable plot to destroy the Festival, Dentsu
spoke to numerous media outlets to spread its false narrative that it had the right to, and had,
cancelled the Festival, and that Dentsu's unilateral cancellation announcement was the result
of W50's mismanagement of the project. Dentsu perpetuated this barrage of negative, false
press reports for one purpose: to ensure that the Festival cannot go forward. Dentsu's
statements to the press, like its theft of nearly $18 million in cash, were and continue to be
calculated to scare off performers and vendors and other stakeholders, to scare off
concertgoers, and to make the production of the Festival a practical impossibility.
9. Notwithstanding Dentsu's deceitful conduct, W50 fully intends to produce the
Festival so it is a great success. The only true impediments to that success are Dentsu's
ongoing interference with W50's contractual right to produce the Festival, Dentsu's theft of
the Festival's funds, and Dentsu's active effort to disparage W50 and the Festival through lies
and mischaracterizations intended to destroy W50's business relationships. W50 seeks the
emergent relief requested herein to preserve the status quo ante pending the appointment of a
mediator and then arbitrators as required by the Agreement's compulsory dispute resolution
10. The Festival is unique -- the fiftieth Anniversary of Woodstock only comes once,
and W50's inability to stage the Festival cannot be adequately replaced with money. Thus, to
preserve the status quo ante, W50 seeks an order from this Court for a preliminary injunction
in aid of arbitration, and while the hearing is pending, a temporary restraining order, requiring
a. Dentsu cease all communications relating to the Festival, including with
the media, and Festival stakeholders, including state and county officials,
venue operators, local vendors, community representatives, insurers,
producers, and talent agencies and performers;
b. Dentsu return to the Festival Bank Account (as defined in the Agreement)
within 24 hours of the Order all funds withdrawn from the Festival Bank
Account, in an amount no less than the $17,800,000.00, plus any other
funds removed for non-Festival related purposes, and provide W50 with
access to the funds in the Account, which W50 may use solely for
Festival-related expenses;
c. Dentsu cooperate with W50 in connection with W50's continued planning
of the Festival, including providing reasonable consents and approvals;
d. Dentsu produce all records relating (i) to the removal of funds from the
Festival Bank Account referred to in (b) above; and (ii) to
communications between Dentsu and any person or entity involved in the
planning or production of the Festival from April 1, 2019 to date; and
e. awarding W50 such other and further relief as the Court may deem just
and proper.
11. W50 is a New York limited liability company that holds licenses to certain
intellectual property rights related to Woodstock.
12. Dentsu Inc. is one of the world's largest advertising agencies and is headquartered
in Japan.
13. Dentsu Aegis Network is wholly-owned by Dentsu, Inc. and is headquartered in
14. Amplifi Live, LLC is the investment arm of Dentsu Aegis Network, and is a
Delaware limited liability company.
15. At all times relevant to this Verified Petition, Dentsu Inc., Dentsu Aegis Network,
and Amplifi Live, LLC were agents of one another, were alter egos of one another, and acted
in concert with and on behalf of one another. Each of the Dentsu entities has been acting
interchangeably in connection with the Festival, including in engaging with musical talent and
other Festival vendors as part of Dentsu's collective effort to kill the Festival.
16. This Court has jurisdiction to hear this petition pursuant to CPLR § 7502(c).
Petitioner intends to promptly commence an arbitration proceeding against Dentsu with the
American Arbitration Association ("AAA") pursuant to the Agreement, which provides for
the arbitration of all disputes should non-binding mediation before the AAA be unsuccessful.
17. Venue lies in this Court pursuant to CPLR § 7502(a).
The Woodstock Movement – Then & Now
18. When the first Woodstock Music and Art Fair was held on August 15-18, 1969, it
attracted hundreds of thousands of people to a small dairy farm in Bethel, New York, in a
celebration of art, music, and community. The original Woodstock festival cemented its place
in history through its focus on cooperation, activism, and harnessing the arts for social
change. The spirit of the "Woodstock movement" has endured across the festival's five-
decade history, as a symbol of perseverance in the face of adversity.
19. In January 2019, W50 announced that it would produce the Festival this coming
August as a celebration of, and spiritual successor to, the original Woodstock festival. The
Festival will bring together a mixture of legacy bands and current stars in a festival lineup that
includes numerous top-level performers such as Jay-Z, Miley Cyrus, and Dead & Co., along
with Carlos Santana and John Fogerty, who performed at the original 1969 Woodstock
concert.
20. With a star-studded lineup and the support the State of New York, Schuyler
County and the Town of Watkins Glen, all of which have devoted substantial resources to
assist with planning efforts, the Festival is expected to have a tremendously favorable and
multi-million dollar impact on the local economy of Watkins Glen and the larger region.
21. Hearkening back to the original Woodstock festival, this year's fiftieth
anniversary event benefits from key partnerships with activist organizations like Head Count,
which registers young voters. W50 also specifically sought out socially-conscious performers
who use their voices to spur change.
W50 and Dentsu Enter Into Their Agreement to Produce The Festival
22. On November 2, 2018, W50 and Dentsu signed the Agreement to produce the
Festival together. The Agreement provided for W50 and Dentsu to move forward to jointly
produce the Festival in good faith, with W50 making its "Woodstock" trademarks for the
Festival available for use in "joint production of the Festival by W50," and Dentsu being the
principal financing partner for the Festival. (Agreement, ¶¶ 2, 4, 8, 18(m).)
23. Amplifi Live, LLC is Dentsu's designated corporate signatory to the Agreement.
The Agreement provides for Amplifi's parent Dentsu to be directly involved, including
receiving credit for the production. Dentsu's direct involvement is confirmed as it is "to
receive 'in association with' credit wherever W50's name is listed as a producer of the
Festival in marketing or advertising materials relating to the Festival." (Id., ¶ 9(a) (Credits).)
24. The Agreement requires prior written approval by both W50 and Dentsu for
certain major decisions.
25. Indeed, Dentsu was required to "cooperate" and "meaningfully consult" with
W50 on "all material business decisions" concerning the Festival. (Id., ¶¶ 2(a), (b); 7(a).)
26. The Agreement also expressly states that the Festival could not be cancelled
unilaterally by one of the parties, stating, "Any decision to cancel the Festival shall be jointly
made in writing by the Parties." (Id., ¶ 12(e) (emphasis added).) No such joint decision was
ever made, much less memorialized in a writing. Indeed, to the contrary, at every point in
time, W50 has stated its intention that the Festival must go on.
27. Under the terms of the Agreement, Dentsu was required to deposit money for the
Festival's production into the Festival bank account, and pay Festival production costs from
the Festival bank account ("Festival Bank Account"). (Id., ¶ 4.) Dentsu is also specifically
barred from withdrawing funds from the Festival Bank Account for purposes other than
producing the Festival. (Id., ¶ 6(a).) Dentsu further acknowledged that "W50 has no
financial or operating history" and that "there is no assurance that Amplifi will recoup any of
its Principal Amount so funded." (Id., ¶ 13(c).)
28. The Agreement provides that it can be terminated for, among other reasons,
Dentsu's misappropriation of funds from the Festival Bank Account or commission of fraud
in connection with the Festival's production. (Id., ¶ 12.) Even if the Agreement is properly
terminated by either party, it contemplates that the Festival continue to be produced. (Id.,
¶¶ 12(c)(iii), 12(d).)
Planning For The Festival Was Proceeding Apace
29. In the months since the signing of the Agreement, W50 has worked diligently and
well to produce the Festival. W50 or its agents have secured contracts with more than 75 top-
level performers, and have worked on permits, ticket sale strategies, logistics, promotion and
other requisites for the Festival. W50 has worked closely with state and county officials on
permitting, selecting and booking the venue, and doing outreach to businesses and landowners
surrounding the venue and interested community members.
30. Dentsu and W50 also entered into an Event Production Agreement with Superfly
Event Services, LLC ("Superfly"), a company experienced in providing production services
for first-class outdoor festivals, such as Bonnaroo and Outside Lands. Until very recently,
Superfly had been working effectively to assist W50 in producing the Festival. W50 suspects
that Dentsu has undermined the relationship with Superfly inducing it to threaten to terminate
its production agreement.
31. Prior to Dentsu's recent sabotage, W50 and its agents have been amazingly
successful in lining up and signing the terrific lineup of talent to perform at the Festival. To
that end, W50, in its own name, entered into binding contracts with each of the more than 75
performers. Those contracts essentially required pre-payment of the performers' performance
fees. Collectively, the performers have been paid in full a total of some $32 million, which
was paid from the parties' Festival Bank Account in accordance with the Agreement.
Dentsu's Unprovoked Attack on The Festival and W50
32. W50 was thus proceeding apace with planning and implementing key logistics to
produce the Festival. Though there were significant issues yet to be worked out as with any
major production, the parties and their professionals were actively engaged in cooperatively
addressing those matters.
33. However, some six weeks ago, as key steps in the production schedule
approached, Dentsu began raising false, pretextual complaints about the planning. As W50
was working diligently to ensure that the Festival would be produced successfully, Dentsu
secretly decided to abandon, and then sabotage the Festival to ensure that it would never
happen. As part of that undisclosed scheme to terminate the Agreement and the Festival,
Dentsu began interfering with the planning and refusing to cooperate in authorizing necessary
payments. Then Dentsu had its lawyers write letters complaining of alleged material breaches
of the Agreement by W50. These allegations were all false. W50 promptly refuted them in
writing, noting in detail the falsity and inaccuracy of the claims. But Dentsu had already
hatched its plan and had no interest in the truth or in honoring the Agreement.
34. On Monday, April 29, Dentsu staged its attack on W50 and the Festival. Dentsu
had its lawyers write two letters to W50, the first purportedly claiming that though Dentsu had
the right to terminate the Agreement for cause, Dentsu was instead electing to invoke the so-
called "Control Option" in the parties' Agreement that supposedly permitted Dentsu to take
control of the Festival's production and exclude W50 from any further role in the Festival.
That letter was absolutely contrary to the terms of the Agreement. The second letter from
Dentsu's lawyers advised that pursuant to Dentsu's Control Option, Dentsu was immediately
cancelling the Festival. That too is absolutely contrary to the express terms of the parties'
35. Then, Dentsu issued a press release to the world advising that it had taken control
of the Festival and was cancelling it due to concerns for safety. The press release was invalid,
unauthorized, violative of the parties' Agreement, and false. It had Dentsu's desired effect,
however, throwing the production of the Festival into doubt, causing concern around the
world and of course for every fan, the Town of Watkins Glen, Schuyler County, the State of
New York, and every performer, producer and party under contract.
36. Then, in further violation of the Agreement, Dentsu absconded with the $17.8
million remaining in the Festival Bank Account, another flagrant violation of the terms of the
37. Over the past week, Dentsu has chosen to expand its efforts beyond contract
violations to tortious interference with W50's many contracts with performers and producers.
Dentsu has been contacting them, insurers and others under contract falsely telling them they
10New York State court rules (22 NYCRR §202.5-b(d)(3)(i))
This is a copy of a pleading filed electronically pursuant to
accepted for filing by the County Clerk. 10 of 20
need not honor those agreements, and should not perform, and promising to indemnify them
for such contract violations. Dentsu's onslaught against W50 and the Festival continues
W50 IS LIKELY TO SUCCEED ON THE MERITS
38. Dentsu knowingly breached its contractual obligations to W50 by wrongfully
pulling out of the Festival in the middle of production for the purpose of killing the project.
Dentsu then went on to lie to the public, media, talent agencies, and performers about its
authority to cancel the Festival. Dentsu's conduct violates the express terms of the
Dentsu Purposefully Stalls Festival Production
39. Six weeks ago, Dentsu stopped approving expenditures for Festival production
costs. And Dentsu began taking an inordinate amount of time to make payments for
production costs as they became due. Dentsu thus breached its obligations under the
Agreement to cooperate with W50 (Agreement, ¶ 2(a)), to allow W50 to make financial
decisions (id., ¶ 3(c)), to attend budget meetings (id., ¶ 3(d)), and to provide monthly balance
sheets and access to financial records (id., ¶¶ 6(e), 7(c)). Dentsu's intentional neglect of
contractual obligations under the Agreement caused the purported lag in production that
Dentsu ultimately blames for its bald attempt to destroy the Festival.
40. Prior to launching its attack against W50 and the Festival in the media, Dentsu
wrote to W50 expressing a series of pretextual claims that W50 was in breach of the
Agreement, when in fact W50 was strictly complying with all material terms of the
41. W50 responded to Dentsu's false allegations, demonstrating that each and every
allegation was a lie, inaccurate or otherwise improper. Contrary to Dentsu's false claims,
W50 complied with its contractual obligations including by consulting with Dentsu on major
issues, handling day-to-day operations, and working with agents to book performers for the
Festival. W50 also formally advised Dentsu of its many acts of fraud, and its many material
breaches of the Agreement.
Dentsu Breaches The Agreement By Commandeering Control
of The Venture and Issuing Press Releases Purporting to Cancel The Festival
42. Dentsu has falsely claimed that it has the right to exercise the Control Option
because it could have terminated the Agreement, and could thus invoke the Control Option as
an alternative. That is false. First, under the express terms of the Agreement, W50 was not in
material breach and thus Dentsu's notice to cure alleged breaches was of no force or effect.
(Agreement, ¶¶ 12(a)(ii), (iv).) Second, as provided in the Agreement, Dentsu had no right to
terminate because it was itself in material breach and had committed fraud, either of which
precluded Dentsu from terminating under the Agreement.1 (Id., ¶¶ 12(a)(i), (iii); 12(b).)
Thus, because Dentsu could not validly terminate, under the Agreement's terms Dentsu could
not elect to exercise the Control Option. (Id., ¶ 12(d).)
43. Moreover, even if, arguendo, Dentsu had the right to terminate, and it did not
have that right, and even if it could exercise the Control Option, which it also could not
validly do, Dentsu could not unilaterally cancel the Festival under the parties' Agreement,
which expressly provides in no uncertain terms that "[a]ny decision to cancel the Festival
shall be jointly made in writing by the Parties." (Id., ¶ 12(e).) No such discussion was made,
no such agreement was reached, and of course, there is no writing reflecting any such
agreement or decision.
Under the Agreement, unless either party files a petition for bankruptcy, one party cannot terminate on the basis of
repeated breaches if the other party would be entitled to terminate on the basis of that party's repeated breaches. (Id.,
¶ 12(b).)
44. Furthermore, even if the Control Option was properly invoked, and it was not, the
Agreement expressly required Dentsu to successfully produce the Festival, not kill it, as it is
attempting to do: "If Amplifi chooses to exercise its Control Option, W50 shall . . . take such
other actions or omit to take such actions as Amplifi shall reasonably direct that are required
to successfully produce the Festival." (Agreement, ¶ 12(d) (emphasis added)).
45. Thus, W50 plainly has a strong likelihood of success that Dentsu has flagrantly
violated the Agreement in exercising the Control Option and attempting to cancel the Festival.
46. W50 has likewise demonstrated beyond any doubt that Dentsu could not validly
abscond with the $17.8 million in the Festival Bank Account. Those funds were expressly
required to be spent only on Festival expenses, and Dentsu could not take those funds on its
unilateral say so. This is the equivalent of one spouse raiding a marital bank account and
changing the locks in the middle of the night to lock out the other spouse and starve them of
money to live. It's contractually wrong and morally reprehensible.
47. As if Dentsu's foregoing contractual violations were not enough, Dentsu's
campaign to kill the Festival has extended to tortious interference with contracts and
defamation of W50 and the Festival.
48. As set forth above, W50 is the party that contracted directly with the performers
(and their producers) who are to perform at the Festival. Dentsu is not a party to those
contracts. W50 is also a party to contracts with insurers and others regarding the Festival.
With express knowledge of those agreements, and intending to procure their breach or
termination, Dentsu has contacted performers, producers, insurers and others this week telling
them not to perform, to terminate, or otherwise to breach those contracts. Dentsu has further
induced or attempted to induce the breach of those agreements by promising to indemnify the
breaching party should they be sued or suffer losses from the breach of their agreements with
W50. Dentsu has even implied to certain performers that if they play ball with Dentsu and
follow its demand to breach their agreement with W50, that Dentsu may find a place for those
performers to perform at the 2020 Summer Olympics in Tokyo, for which Dentsu is a major
sponsor. Thus, Dentsu's tortious interference with contract could not be more egregious nor
more apparent.
49. Dentsu, a multi-billion dollar media behemoth, has also used the media this past
week to disparage the Festival and W50.
50. An article dated May 2, 2019 provides as follows:
Michael Lang, lead organizer of Woodstock 50, is adamant the anniversary
festival will take place in August with the same lineup, same partners and
at the same venue. A source with Amplifi Live, the investment arm of
lead financier Dentsu Aegis Network which canceled the festival on
Monday, unequivocally disagrees. "He'd have to come up with a
different name. Different talent. Different everything," the source told
The Daily Beast. "The festival is now ours, and then we decided to cancel
On Tuesday, a source for Dentsu denounced claims that permits are still
being considered, stating they contacted all state and county offices to
cancel permits. However, the Department of Health said the speedway's
permit is still pending and was never asked to be revoked. To which the
Dentsu source replied, "I can only assume it's government. It takes time to
wind things down." The State Department of Health reconfirmed to The
Daily Beast Wednesday a day after Dentsu's claim that the speedway's
permit is still pending and they are in contact to "determine" next steps.
Following their Monday cancellation statement, a source for Dentsu
claimed they told all major talent agencies the festival is a no-go.
Billboard spoke with an unnamed talent agent who sided with Dentsu,
saying the artist contracts are with the financiers and not Woodstock 50.2
Joseph Longo, "How Woodstock 50 Is Shaping Up to Be Fyre Fest 2.0," The Daily Beast (May 2, 2019), available
at https://www.thedailybeast.com/how-woodstock-50-is-shaping-up-to-be-fyre-fest-20.
51. Accordingly, W50 has a very strong likelihood of success on its claims for
Dentsu's multiple breaches of contract, Dentsu's lack of contractual authority to invoke the
Control Option, to cancel the Festival, to loot the Festival bank account and to interfere with
the production of the Festival. W50 has likewise demonstrated a strong likelihood of success
on its tort claims for interference with its contracts with performers, insurers and other third
parties, and for defamation and commercial disparagement.
W50 WILL SUFFER IMMEDIATE AND IRREPARABLE HARM ABSENT
INJUNCTIVE RELIEF PENDING ARBITRATION
52. W50 is ready, willing and able to continue to produce the Festival and make it a
great success. The Town, State and County want the Festival to proceed. The public
desperately wants the Festival to proceed. The performers are ready to honor their contracts
and make the Festival a great tribute to the Woodstock tradition and culture.
53. Though Dentsu has violated the Agreement, its duties, and every norm of
decency, W50 cannot stop Dentsu's onslaught unless this Court preserves the status quo ante
while W50 seeks to enforce its rights before the AAA, as required by the Agreement.
54. Absent this relief, Dentsu's illegal and outrageous attack on the Festival and on
W50 will have succeeded because W50 will be unable to produce the Festival, secure the
permits, retain the talent, and attract the ticket purchasers. Indeed, in the next four to six
weeks alone, W50 urgently needs to fund fees and expenses for production, promotion,
advertising, permits, engineering, marketing, and traffic management, among others, totaling
some $6 million to $9 million. These are fees and expenses Dentsu and W50 agreed were
valid and necessary Festival expenses. The Festival's and W50's opportunities will have been
lost, and their reputations irreparably harmed without the requested injunctive relief, and
interim temporary restraining order.
55. The loss of W50's one-time opportunity to stage the Festival cannot be
recompensed through monetary damages. Absent the grant of injunctive relief, including the
restoration of the Festival's funding for production costs, W50 will not have the opportunity
to stage this iconic and unique event.
THE BALANCE OF THE EQUITIES FAVORS
GRANTING INJUNCTIVE RELIEF TO W50
56. The balance of the equities favors the grant of the injunctive relief requested by
W50.
57. W50's request for injunctive relief seeks to preserve the status quo ante pending
dispute resolution processes to address Dentsu's misconduct. W50 is not seeking affirmative
actions from Dentsu apart from what is required by law and the Agreement. There is no doubt
that the Agreement contemplates that the Festival will proceed and the law prohibits unlawful
interference with W50's rights. W50's opportunity to stage the Festival is a once-in-a-
lifetime opportunity that cannot be replaced by money. Absent injunctive relief, the public
will also be deprived of the opportunity to participate in a momentous celebration of
Woodstock.
58. Dentsu will not suffer any comparable hardship if the Court grants W50's request
for injunctive relief. Complying with contractual obligations to avoid interference with
W50's right to stage the Festival, and with W50's relationships with talent agencies,
performers, and the public, will not harm Dentsu. Even replacing the funds stolen from the
Festival Bank Account will not harm Dentsu as these are amounts that Dentsu was prepared to
pay and potentially lose since the Principal Amount would only be repaid through Festival
revenue.
59. To the extent Dentsu would suffer harm, it is not grounds for denying W50 its
requested relief because any harm to Dentsu would be a result of its unilateral and improper
violations of its contractual obligations. And insurance coverage will cover any third party
claims against Dentsu that may arise. Thus, the balance of the equities tips heavily in W50's
favor.
PRAYER FOR RELIEF
WHEREFORE, for the foregoing reason and the reasons set forth in the accompanying
memorandum of law, Petitioner W50 respectfully requests that the Court issue an order for a
preliminary injunction in aid of arbitration, and pending the hearing and determination of the
motion for such relief, a temporary restraining order, that requires that:
funds removed for non-Festival related purposes, and provide W50 access
to the funds in the Account, which W50 may use solely for Festival-
related expenses;
Festival Bank Account referred to in (b) above; and (ii) communications
between Dentsu and any person or entity involved in the planning or
production of the Festival from April 1, 2019 to date; and
No previous applications for the relief requested has previously been made to this or any
other Court.
Dated: New York, New York
By: /s/ Marc E. Kasowtiz
Marc E. Kasowitz
Albert Shemmy Mishaan
David E. Ross
Nefertiti J. Alexander
KASOWITZ BENSON TORRES LLP
Attorneys for Petitioner
WOODSTOCK 50, LLC
ss:
COUNTY OF LOS ANGELES )
The undersigned, being duly sworn, deposes and says that I am the Managing Member of
Woodstock 50, LLC, the petitioner in this action, that I have read the foregoing Verified Petition,
and that the allegations contained therein are true and correct to the best of my knowledge, except
as to those matters alleged on information and belief, which I believe to be true.
Sworn to me this 8th day
of May, 2019
rU,
aseTc'e'el'a" exAkee ceitat
f7).0-AffaX—
Notary Public 10-(1,17 /a/olfre
JU RAT
A notary public or other officer completing this certificate verifies only the
identity of the individual who signed 'the document to which this certificate
is attached, and not the truthfulness, accuracy, or validity of that document.
Subscribed and sworn to (or affirmed) before me on this rt'day of Wt1/'
20 i cl by P :-6-:-c,4%
proved to me on the basis of satisfactory evidence to be the person(.) who appeared
before me.
RICHARD L. EVANS
Notary Public - California
V1711.-J Los Angeles County
Commission # 2202061
(Seal) My Comm, Expires Jul 17,2021
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FINANCING AND PRODUCTION AGREEMENT
This financing and production agreement ("Agreement") dated as of November 2, 2018 is by and
between Amplifi Live, LLC, a Delaware limited liability company ("Amplifi"), and woodstock
50, LLC, a New York limited liability company ("W50"). Each of Amplifi and W50 are hereby
referred to as "Party" and collectively the "Parties." For good and valuable consideration, the
Parties hereby agree as follows:
1. Background.
(a) Woodstock Ventures LC, a Wyoming limited liability company, has agreed to
exclusively license to W50 certain intellectual property rights related to the Festival (as defined
below) pursuant to the Trademark and Service Mark License Agreement, dated November 2, 2018,
by and between Woodstock Ventures LC as licensor and W50 as licensee (the "License
Agreement"). The Parties intend to produce a music and arts festival in August 2019 to celebrate
the 50th anniversary of the 1969 Woodstock Music & Art Fair (the "Festival"). The Festival will
be held on 900 acres of greenfields next to Watkins Glen International in Watkins Glen, NY.
(b) W50 is a company newly formed for purposes of producing the Festival. Amplifi
acknowledges that it has been provided with copies of (i) the articles of formation of W50 filed
with the Secretary of State of the State of New York ("Articles"), (ii) the License Agreement
executed by all the parties thereto, and (iii) the operating agreement of W50 executed by all the
parties thereto ("Operating Agreement"). During the period from the date hereof until the earlier
of (A) the termination of this Agreement or (B) the date when Amplifi has received the Festival
Net Proceeds or other amounts payable hereunder in an amount equal to the Principal Amount
actually funded pursuant to Section 4(a), W50 shall not, without Amplifi's prior written consent
in each instance (which shall not be unreasonably withheld, conditioned or delayed), make any
amendments to or terminate the Articles, the License Agreement or the Operating Agreement, in
each case which would adversely affect Amplifi's rights hereunder or Amplifi's participation in
the Festival Proceeds.
(c) Concurrently with the execution of this Agreement, Woodstock Ventures LC and
Amplifi have entered into the Future Financing Rights Agreement providing Amplifi with certain
rights regarding the production of additional future "Woodstock" festivals and other revenue
streams relating to the Festival that are not covered in this Agreement (e.g., a partnership with a
publisher to produce "W50 Magazine" for the Festival).
2. Festival Specifications and Management.
(a) The Parties hereby agree to cooperate to produce the Festival in a good and
workmanlike manner in accordance with highest industry practices and standards. The Parties shall
be jointly responsible for the day to day operations for the development, production and marketing
of the Festival (with a right to delegate services to third parties), including, without limitation, (i)
booking and coordination of all artists; (ii) booking/leasing of the Festival location; (iii) managing
the box office and ticket sales; (iv) production of the Festival, including coordination of the stage,
NY 247555276v16
sound, lights, video, volunteers, and stagehands; (v) supervision and coordination of the vendor
sales including food, bar, art, and apparel; (vi) contracting with all vendors and suppliers, including
tents, fence, port-a-cans, clean-up, electrical supplies, catering, etc., with such primary vendors;
(vii) providing private security in coordination with existing state and local police; and (viii)
filming or otherwise recording the Festival, on its own behalf or through third party vendors.
(b) The Parties shall consult with each other on a regular basis on matters relating to
the Festival and shall obtain the other Party's prior written approval for the matters specifically set
forth in this Agreement.
(c) The Parties jointly agree that the Festival shall meet the specifications set forth on
Exhibit A. Any material deviation from the foregoing specifications shall require the joint written
approval of the Parties.
(d) The Parties shall jointly enter into agreements with the following major vendors
(the "Major Vendor Agreements"): (i) ticketing agent, (ii) venue landlord (e.g. Watkins Glen
International, Inc.), (iii) production partners (e.g., Superfly, Danny Whimmer Presents), (iv)
performing artists receiving more than $500,000 to perform at the Festival and (v) any other
vendors for the Festival who are expected to receive more than $500,000 in aggregate
compensation. W50 shall have the right to lead negotiations with such major vendors, but shall
consult in good faith with Amplifi throughout the negotiation process. The Parties shall jointly
agree on any engagement of outside legal counsel to assist in the review and negotiation of all
Major Vendor Agreements, and any other Festival-related agreements involving aggregate
payments of $100,000 or more.
(e) Amplifi will have the right to approve the ticketing agent for the Festival and the
terms of the agreement with such ticketing agent. The Parties shall jointly agree on the following
matters with respect to ticket sales for the Festival: (i) the ticket prices and scaling; (ii) the Festival
pre-sale or promotional policies; and (iii) the ticket refund policies and procedures. All gross
revenues from ticket sales or generated through the ticketing agent or its partners ("Ticket Sale
Gross Revenue") shall be deposited into a separate joint escrow account held for the benefit of
Amplifi and W50 (the "Ticket Account"). No funds other than Ticket Sale Gross Revenue (and
interest thereon) shall be deposited in the Ticket Account. All funds in the Ticket Account shall
be held in such account until the conclusion of the Festival, unless otherwise jointly approved in
writing by the Parties.
(f) The Parties shall cooperate to work with state and local police in planning and
organizing the Festival. Additionally, the Approved Budget includes allocations to pay the
expenses for state and local government services directly related to the Festival, and the Parties
will utilize state and local government services as much as appropriate. The Parties shall engage
third-party advisors as necessary to ensure that the production of the Festival complies with all
applicable local, state and federal laws and regulations.
(g) Subject to the joint approval of the Parties, Amplifi may perform or cause to be
performed (either through its affiliates or independent contractors) marketing, licensing,
promotion and advertising services relating to the Festival. Such services shall be subject to
separate agreements with W50.
(h) Neither Party, nor any director, officer, shareholder, agent, employee, consultant,
contractor, representative or affiliate of any Party, shall:
(i) solicit, offer or accept any kickbacks, bribes or illegal payments in the hiring
or soliciting of any vendors for the Festival or to secure permits or other governmental
approvals for the Festival;
(ii) take any action, directly or indirectly, to establish or maintain any unlawful
or unrecorded fund of corporate monies or other assets; make any false or fictitious entry
on its books or records; participate in any racketeering activity; or make any bribe, rebate,
payoff, influence payment, kickback, or other unlawful payment of a similar or comparable
nature, to any person or entity, private or public, regardless of form, whether in money,
property, or services, to obtain favorable treatment in securing business or to obtain special
concessions, or to pay for favorable treatment for business secured or for special
concessions already obtained, and no Party shall participate in any illegal boycott or other
similar illegal practices; or
(iii) take any action, directly or indirectly, that would result in a violation by
such persons of the UK Bribery Act 2010, as amended, and the rules and regulations
thereunder, or any other law, rule or regulation of any locality of similar purpose.
(i) Each Party shall disclose to the other Party any ownership or other economic
interest in any of the vendors for the Festival or other partners hired to produce the Festival.
(j) Neither Party shall make any public announcement confirming musical or other
performing talent at the Festival, or any other public announcement that may restrict the ability of
the Parties to obtain refunds from musical or other performing talent, until the Parties have
mutually agreed in writing to make such type of public announcement for the first time (the "Initial
Festival Announcement"). Further, prior to the Initial Festival Announcement, the Parties shall
have obtained written performance commitments from the minimum amount of performing artists
in each tier of performing artists set forth on Exhibit E. If such minimum number of commitments
in each tier is not obtained by December 31, 2018, the Parties will decrease the Approved Budget
in a mutually agreed upon manner to account for reasonably anticipated decreases in ticket sales
and other revenues.
(k) Amplifi acknowledges that W50 is a party to the License Agreement and is
responsible for compliance with the terms thereof. Amplifi further acknowledges that it has
reviewed the terms of the License Agreement. Amplifi shall take all reasonable actions as directed
by W50 to comply with, and to facilitate W50's compliance with, the terms of the License
Agreement. Amplifi shall not in any way utilize the Festival IP (as defined below) other than with
the prior written consent (email sufficient) of W50.
3. The Budget and the Cash Flow Schedule.
(a) The initial budget of the Festival jointly agreed by the Parties is attached hereto as
Exhibit B (the "Approved Budget") and the initial cash flow schedule of the Festival jointly agreed
by the Parties is attached hereto as Exhibit C (the "Approved Cash Flow Schedule"). Any
modification to the total amount of the Approved Budget or in the total amount or timing of the
Approved Cash Flow Schedule shall require the prior written approval of both Parties and, upon
such approval, such updated budget or cashflow schedule shall be deemed the "Approved Budget"
and the "Approved Cash Flow Schedule" for purposes of this Agreement.
(b) The Parties acknowledge that the Approved Budget is based on the assumptions
that 150,000 tickets will be sold for the Festival and that the media and sponsorship sales in
connection with the Festival will total at least $22,000,000. In March 2019, the Parties shall
determine in good faith (using common industry standards) whether such assumptions remain
accurate. If the Parties determine that the projection for the Festival's ticket sales should be
increased or decreased by more than 30,000 tickets from the original assumption of 150,000 tickets
or that the media and sponsorship sales are lower or higher than projected, the Parties will adjust
the Approved Budget in a mutually agreed upon manner in order to address such increase or
decrease in ticket sales or in media and sponsorship sales, as the case may be.
(c) Subject to Section 2(d) and the other terms of this Agreement, W50 shall have the
right to make day-to-day financial decisions for the Festival to the extent that the relevant financial
decisions do not exceed any applicable sub-item in the Approved Budget by more than 15%.
(d) The Parties will form a budget and cash flow schedule committee consisting of one
person from each of the Parties (the "Budget Committee") that will meet on a weekly basis from
the date hereof through the culmination of the Festival to review the Approved Budget and
Approved Cash Flow Schedule and make adjustments as mutually agreed. Any such updated
budget or cashflow schedule shall be deemed the "Approved Budget" and the "Approved Cash
Flow Schedule" for purposes of this Agreement.
4. Funding Obligations.
(a) Subject to the terms and conditions of this Agreement, Amplifi shall provide up to
$49,141,000 for use in paying the production costs of the Festival (the "Principal Amount"). The
Principal Amount shall be funded as follows:
(i) Amplifi shall, on or before November 7, 2018, transfer $12,000,000
("Initial Deposit") by wire transfer of immediately available funds to a dedicated bank
account held by Amplifi that is specifically set up for purposes of the Festival related costs
(the "Festival Bank Account").
(ii) Amplifi shall transfer the remaining Principal Amount, by wire transfer of
immediately available funds, to the Festival Bank Account in instalments on the date such
instalment is required (or if such day is not a business day, on the next business day) as set
forth in the Approved Cash Flow Schedule (as such schedule may be modified from time
to time in accordance with the terms of this Agreement).
(b) If the Parties agree on a total increase of the Approved Budget, subject to Amplifi
being in compliance with its funding obligations in Section 4(a), Amplifi shall have a first
opportunity to finance such increased amount above the previously agreed Approved Budget
(each, an "Additional Principal Amount"). Amplifi shall have fifteen (15) days from the approval
of the increased Approved Budget to confirm its election to fund the remaining amount on the
dates set forth in such revised Approved Budget.
(c) For the avoidance of doubt, the Principal Amount and any Additional Principal
Amount shall be used solely to fund the production costs of the Festival in accordance with the
Approved Budget and the Approved Cash Flow Schedule. The Principal Amount and the
Additional Principal Amount shall not bear any interest. Notwithstanding anything to the contrary
in this Agreement, under no circumstances shall Amplifi have any obligation to fund any amounts
in excess of the Principal Amount.
(d) If Amplifi fails to fund any portion of the Principal Amount as set forth in Section
4(a) above or any portion of the Additional Principal Amount as set forth in Section 4(b), W50 is
free to pursue financing from any other sources to cover the production costs of the Festival.
However, in the event that Amplifi fails to fund any portion of the Additional Principal Amount
and W50 pursues financing from other sources, Amplifi shall have the right to approve (which
approval shall not be unreasonably withheld, delayed or conditioned if such additional financing
does not diminish any of Amplifi's rights to Festival Net Proceeds set forth in this Agreement)
these other sources and the terms upon which such financing is provided by such other sources.
(e) W50 shall contribute or cause to be contributed any revenue generated from media
and/or sponsorship sales in connection with the Festival (less applicable commissions) to the
Festival Bank Account to cover the production costs of the Festival. Such contributions shall be
made within five (5) business days of receipt of such revenue by W50 (or its agents).
5. Insurance. W50 will purchase liability insurance relating to the activities and operations of
the Festival, with policy limits of no less than $50,000,000, and for the cancellation of the Festival,
with policy limits of no less than $120,000,000, which insurance will name Amplifi, Woodstock
Ventures LC and their respective parents, affiliates, subsidiaries, licensees, and successors, and its
and their officers, directors, employees, agents, representatives and assigns as additional insureds.
W50 will also purchase and maintain standard general commercial liability and errors-and-
omissions insurance from a qualified, reputable and licensed insurance company in an amount not
less than $3,000,000 combined/single limit, with a deductible amount of not greater than $10,000,
for each single claim and will name Amplifi, Woodstock Ventures LC and their respective parents,
affiliates, subsidiaries, licensees, and successors, and its and their officers, directors, employees,
agents, representatives and assigns as additional insureds. Amplifi will have the right to approve
the liability insurance, the cancellation insurance and the general commercial liability and errors-
and-omissions insurance policies (collectively, the "Insurance Policies"). The Parties will jointly
agree on the timing of purchase of each Insurance Policy. W50 will provide Amplifi with a copy
of the certificate of each Insurance Policy. The Initial Festival Announcement shall not occur until
the Parties have bound a cancellation insurance policy for the Festival that is consistent with the
terms of this Section 5.
6. Festival Bank Account; Financial Controls; Financial Reporting; Taxes.
(a) The Festival Bank Account shall be used to hold revenue generated by the Festival
(other than Ticket Sale Gross Revenue), to pay costs and expenses incurred from the Festival in
accordance with the Approved Budget, the Approved Cash Flow Schedule and the terms of this
Agreement, and to disburse revenues related to the Festival as contemplated in this Agreement.
Except as otherwise jointly agreed by the Parties in writing, all funds and revenue generated from
the Festival (other than Ticket Sale Gross Revenue) shall be deposited into the Festival Bank
Account and any funds shall only be withdrawn or disbursed from the Festival Bank Account to
pay for costs and expenses of the Festival, or to disburse revenues to the Parties, as contemplated
in this Agreement. Amplifi shall open the Festival Bank Account as soon as practicable from the
date of this Agreement.
(b) Amplifi shall control all payments from the Festival Bank Account. Amplifi agrees
to timely make all payments from the Festival Bank Account that are incurred in accordance with
the Approved Budget and the terms of this Agreement and that are supported by valid invoices
from the applicable vendor. W50 shall be granted read-only access to the Festival Bank Account.
(c) The Parties agree that W50 shall be reimbursed on a monthly basis for rent, payroll
and operating expenses in the amounts mutually agreed in advance by W50 and Amplifi (with
each party acting in good faith).
(d) Any travel and entertainment expenses incurred by W50 or Amplifi (subject to
Section 7(c)) in connection with the Festival shall only be reimbursable in accordance with the
guidelines set forth on Exhibit D of this Agreement (the "T&E Reimbursement Guidelines").
Amplifi shall provide W50 for its review with an itemized list of any such expenses reimbursable
to Amplifi on a monthly basis. W50 and Amplifi shall also require any vendors or agents hired in
connection with the Festival to abide by the T&E Reimbursement Guidelines.
(e) Amplifi reserves the right to appoint a finance director and other employees to
maintain the books and records of the Festival and to oversee all accounts receivable and accounts
payable from the Festival Bank Account. Amplifi shall maintain monthly balance sheets and profit
and loss statements for the Festival in accordance with the International Financial Reporting
Standards (IFRS) on a consolidated basis, with revenues and costs allocated to Amplifi and W50
in accordance with the proportionate share of their profits from the Festival.
7. Business Controls/Delivery.
(a) The Parties shall meaningfully consult with each other with respect to all material
business decisions relating to the Festival and seek the other Party's prior written consent on the
matters specifically set forth in this Agreement; it being understood that in the event of a dispute
among the Parties with respect to any such decision, W50 and Amplifi shall meet to negotiate and
find compromise in good faith. Material business decisions shall include, without limitation, (i)
the terms of the Major Vendor Agreements, (ii) hiring of third-party consultants, (iii) hiring of
production partners, (iv) hiring of ticket agent, (v) hiring of security, food & beverage or hospitality
vendors and (vi) deviations from the specifications set forth on Exhibit A.
(b) Each Party will, in good faith in their decision making for producing the Festival,
take into account the advice of the other Party in their respective fields of expertise.
(c) Each Party shall be entitled through representatives that it designates from time to
time, to attend the set-up and production of the Festival on location, at such Party's own expense,
provided that such attendance does not materially interfere with the production of the Festival.
The Parties will provide each other with daily production updates (if requested by the other Party)
and such other information as is reasonably requested by the other Party including, without
limitation, access to all financial books, records and cost reports pertaining to the Festival.
8. Ownership/Exploitation of the Festival Intellectual Property. The Parties hereby
acknowledge and agree that the intellectual property rights in and to the Woodstock trademarks
listed on Exhibit F hereto and any derivatives thereof to be used in conjunction with the Festival
are and will be owned by Woodstock Ventures LC. The Parties further acknowledge that
Woodstock Ventures LC has exclusively licensed to W50 the trademarks listed on Exhibit F (the
"Festival IP") pursuant to the terms of the License Agreement. Throughout the term of this
Agreement, W50 shall make available the Festival IP for use in the joint production of the Festival
by W50 as permitted under the terms of the License Agreement and shall not sublicense or seek to
sublicense the Festival IP relating to the production of the Festival to any other person or entity,
or otherwise exploit or seek to exploit the Festival IP relating to the production of the Festival
other than as contemplated by this Agreement, without Amplifi's prior written consent. Amplifi
shall not sublicense or seek to sublicense the Festival IP relating to the production of the Festival
to any person or entity, or otherwise exploit or seek to exploit the Festival IP relating to the
production of the Festival other than as contemplated by this Agreement, without W50's and
Woodstock Venture LC's prior written consent. The Parties acknowledge that only Joel
Rosenman, Tom Cyrana or their authorized designees shall have the authority to grant consents on
behalf of Woodstock Ventures LC.
9. Credits.
(a) Subject to Amplifi being in compliance with its funding obligations in Section 4
and provided that Amplifi is not in material breach of this Agreement upon which W50 has a right
to terminate this Agreement pursuant to Section 12, unless otherwise requested by Amplifi in
writing, Dentsu Aegis Network (of which Amplifi is a member) shall be entitled to receive "in
association with" credit wherever W50's name is listed as a producer of the Festival in marketing
or advertising materials relating to the Festival. The size, placement and other aspects of such
credits shall be mutually agreed upon by the Parties.
(b) No casual or inadvertent failure to comply with the provisions of this Section 9
shall constitute a breach of this Agreement by W50. Promptly upon W50's receipt of Amplifi's
written notice of any noncompliance, W50 shall correct the same prospectively to the extent
practicable and shall not be required to correct any material already ordered.
10. Allocation of Festival Proceeds.
(a) For purposes of this Agreement, "Festival Proceeds" is defined as the gross revenue
generated by or in connection with the Festival and received by or credited to W50 or the Festival
Bank Account from third parties, with such gross revenue including but not limited to the
(i) the gross revenue from all ticket sales for the Festival, less the following:
(A) actual third party service fees on the tickets; (B) any actual third party transaction fees
on credit card charges on ticket sales; and (C) refunds on tickets that the ticketing agent
may give to ticket buyers. Tickets provided to Festival sponsors as part of the sponsorship
agreement will not be included in the calculation of ticket revenues. The Parties shall
request the ticketing agent to furnish a preliminary statement of the gross box office
receipts for each event day of the Festival within twenty four (24) hours after the conclusion
of the Festival, and a final, certified statement of the gross box office receipts for the
Festival within four (4) weeks after the Festival;
(ii) all gross revenue from food and beverage (including alcoholic beverage)
sales at the Festival. Alcoholic beverages provided as part of sponsorship agreements or as
part of premium tickets (e.g. VIP tickets) will not be included in the calculation of alcoholic
beverage revenues;
(iii) all sponsorship and media revenues from Festival sponsorship agreements
(less any commissions payable by W50 with respect to such sponsorship agreements);
(iv) gross revenue from the sale of Festival merchandise and general store
merchandise less: (A) actual service fees paid to third party vendors; (B) any actual third
party transaction fees on credit card charges on merchandise sales; and (C) taxes paid for
sale of Festival merchandise;
(v) gross revenue from the sale of travel packages, camping packages, VIP
packages, Skydeck packages, and transportation services (helicopters, shuttles) for the
Festival; and
(vi) gross revenue from all other commercial activities related to the Festival,
including but not limited to broadcasting/internet distribution and still and video images
from the Festival; ATM fees and services; locker rental fees and services; payment plan
fees and services; parking fees and services; hotel commissions; and service charges of any
provided, that Festival Proceeds shall be determined after all refunds, credits, allowances,
discounts and adjustments that are afforded to all third parties (all of which shall be made pursuant
to the terms of the Approved Budget or a Major Vendor Agreement, or otherwise with the joint
approval of Amplifi and W50).
(b) Notwithstanding anything to the contrary in Section 10(a) above, but without duplication
of any costs or expenses deducted from Festival Proceeds pursuant to Section 10(a) above, the cost
and expenses of the production of the Festival incurred in compliance with this Agreement and the
Approved Budget shall be deducted from the Festival Proceeds on a continuing and cumulative
basis, including, without limitation, the following costs and expenses:
(i) The repayment of any debt financing by third parties for the Festival, and
any interest thereon, if Amplifi has breached its funding obligations under this Agreement
for the Principal Amount or for any Additional Principal Amount that Amplifi has
committed to provide in writing; and
(ii) Any actual out-of-pocket costs of production, delivery, promotion and
marketing directly incurred to produce the Festival, including all insurance costs required
under Section 5 above and payments to agents, accountants, attorneys and other parties
engaged by W50 or Amplifi in connection with the production of the Festival (including
any such attorneys engaged by or on behalf of W50 or Amplifi in connection with the
negotiations and execution of this Agreement and the Agency Representation Agreement,
dated as of the date hereof, between W50, MKTG, Inc. and Collective Planet, LLC, d/b/a
Concept One Communications), and a reserve to cover expenses incurred but not yet
charged to the Festival;
provided, that (i) the licensing fees payable to Woodstock Ventures LC pursuant to the License
Agreement shall not be deducted from the Festival Proceeds and shall be paid 100% by W50 and
(ii) any profit or revenue sharing arrangements relating to the Festival shall not be deducted from
the Festival Proceeds, unless mutually agreed by Amplifi and W50. In the event that either Amplifi
or W50 (the "Sharing Party") agrees to any profit or revenue sharing arrangements relating to the
Festival without the other party's prior written consent, such profit or revenue sharing shall come
out of the Sharing Party's share of Festival Net Proceeds. Notwithstanding the foregoing, W50
acknowledges that any profit or revenue share arrangements with Superfly Productions shall not
be deducted as an expense of the Festival and shall be paid solely out of W50's allocation of
Festival Net Proceeds.
(c) The balance of Festival Proceeds after the payment of the costs and expenses set
forth in Section 10(b) shall form the "Festival Net Proceeds" which shall be allocated and paid to
the Parties, subject to Section 12(c), in the following order and priority:
(i) First, to Amplifi until Amplifi has received 100% of the Principal Amount
actually funded under this Agreement and 100% of the Additional Principal Amount, if
any, actually funded under this Agreement; and
(ii) Second, 36% of the remaining amount of the Festival Net Proceeds shall be
allocated and paid to Amplifi, and 64% of the Festival Net Proceeds shall be allocated and
paid to W50.
For the avoidance of doubt, any payment of "Net Profits" to Woodstock Ventures LC under the
License Agreement shall be made by W50 solely out of W50's allocation of Festival Net Proceeds
as set forth in this Agreement. No inconsistency between the calculation of "Net Profits" under
the License Agreement and the calculation of Festival Net Proceeds under this Agreement shall
have any effect on the calculation of Festival Net Proceeds under this Agreement.
(d) Within ninety (90) days from the end of the Festival, as the case may be, the Parties
will close the books on the Festival and determine the Festival Proceeds and the Festival Net
Proceeds based upon the accounting principles set forth in Section 6(e). The Parties will calculate
the amount to which the Parties are entitled under Section 10(c) on or before the 90th day after the
Festival is held and will promptly notify and pay to the Parties such amounts. If subsequent to
payment of the amounts owed under this Agreement, it is determined that an adjustment needs to
be made — for example, due to refunding of ticket prices to Festival patrons — then the Party that
owes any money due to the adjustment will pay such amount within thirty (30) days of its receipt
of notice of the amount due; provided that such refund obligation will terminate and the payments
will be final for the Festival one (1) year after the end of the Festival. If this Agreement is
terminated pursuant to Section 12(a), the disbursements to Amplifi shall be made as set forth in
Section 12(c).
11. Records and Auditing. During the term of this Agreement and for a period of at least three
(3) calendar years after the Festival, the Parties will maintain true and accurate business and
financial records of all amounts derived from the production and exploitation of the Festival,
including records that contain information sufficient to verify the revenues from ticket sales, food,
merchandise and alcoholic beverage sales, travel package sales, sponsorship revenue, and the
completeness and accuracy of all payments under this Agreement. At its own expense and on ten
(10) days' advance written notice to the other Party, each Party or its designee shall have the right
to examine the books and records held by either Party relating to the Festival for the sole purpose
of certifying the accuracy of reports, the reasonableness of all fees and expenses and determining
the amount of revenue due to the Parties, and for such Party's own tax and accounting planning
and reporting purposes.
12. Termination; Festival Cancellation.
(a) This Agreement may be terminated as follows:
(i) by W50, upon ten (10) days written notice to Amplifi in the event of any of
the following breaches of this Agreement by Amplifi that is not cured during such notice
period: (A) if Amplifi has failed to fund any portion of the Principal Amount or any
Additional Principal Amount that Amplifi has committed to provide in writing when
required under this Agreement; (B) upon Amplifi's repeated or serial failure to disburse
funds from the Festival Bank Account to pay for the production of the Festival in
accordance with the terms of this Agreement; (C) upon Amplifi's repeated or serial breach
of this Agreement with respect to a failure to obtain W50's approval for the matters
specifically requiring W50's approval or joint approval of the Parties hereunder or (D)
upon Amplifi's misappropriation of funds from the Festival Bank Account;
(ii) by Amplifi, upon ten (10) days written notice to W50 of W50's repeated or
serial breach of this Agreement with respect to a failure to obtain Amplifi's approval for
the matters specifically requiring Amplifi's approval or joint approval of the Parties
hereunder, and such repeated or serial breach is not cured during such notice period;
(iii) by W50, upon immediate written notice to Amplifi of: (A) Amplifi's
officer's or employee's indictment for, conviction of, or plea of guilty or nolo contendere
to, any crime that, in the reasonable opinion of W50's outside counsel, results in, or is
reasonably expected to result in, material harm to the business or reputation of the Festival;
or (B) Amplifi's officer's or employee's commission of or participation in an act of fraud
(in the reasonable opinion of W50's outside counsel) in connection with the production of
the Festival;
(iv) by Amplifi, upon immediate written notice to W50 of: (A) W50's officer's
or employee's indictment for, conviction of, or plea of guilty or nolo contendere to, any
crime that, in the reasonable opinion of Amplifi's outside counsel, results in, or is
(B) W50's officer's or employee's commission of or participation in an act of fraud (in the
reasonable opinion of Amplifi's outside counsel) in connection with the production of the
Festival; or (C) in the event W50 fails to, or becomes unable to, make available the Festival
IP for use in connection with the production of the Festival;
(v) upon thirty (30) days written notice to the other Party in the event that the
Festival does not occur by August 31, 2019 or is mutually cancelled prior to such date
pursuant to Section 12(e); or
(vi) upon immediate written notice to the other Party if a Party makes a general
assignment for the benefit of creditors, files a voluntary petition in bankruptcy or for
reorganization or arrangement under the bankruptcy laws, if a petition in bankruptcy is
filed against such Party, or if a receiver or trustee is appointed.
(b) Notwithstanding the foregoing, (i) W50 shall not be entitled to terminate this
Agreement pursuant to Sections 12(a)(i) or 12(a)(iii) for so long as Amplifi would be entitled to
terminate this Agreement pursuant to Sections 12(a)(ii) or 12(a)(iv) and (ii) Amplifi shall not be
entitled to terminate this Agreement pursuant to Sections 12(a)(ii) or 12(a)(iv) for so long as W50
would be entitled to terminate this Agreement pursuant to Sections 12(a)(i) or 12(a)(iii).
(c) Effect of Termination.
(i) In the event of any termination of this Agreement that results in a
cancellation of the Festival (except upon a termination by W50 pursuant to Sections
12(a)(i) or 12(a)(iii)) or pursuant to Section 12(a)(v), Amplifi shall be entitled to receive,
in priority to W50 or any additional sources of funding for the Additional Principal Amount
(subject to any senior financing that Amplifi has agreed to pursuant to Section 4(d), if
applicable, and after payment of all non-refundable or cancellable costs and expenses of
the production of the Festival incurred in compliance with this Agreement and the
Approved Budget), the following funds (the "Recovery Funds") until Amplifi has received
a return of the Principal Amount and the Additional Principal Amount, if any, actually
funded by Amplifi: (i) all unused portions of the Principal Amount and the Additional
Principal Amount, if any, as of the date of termination of this Agreement, (ii) all amounts
refunded by vendors, talent and any other third parties engaged to provide goods or services
in connection with the Festival ("Vendors"), (iii) all insurance proceeds actually paid to
W50 in connection with the cancellation of the Festival, if any, from the Insurance Policies,
(iv) all litigation proceeds, if any, from any claims made by W50 or Amplifi against third
parties in connection with the cancellation of the Festival, and (v) all Festival Proceeds, if
any. After payments of all amounts owed under this Section 12(c)(i), any remaining
Recovery Funds shall be shared by Amplifi and W50 in accordance with the Festival Net
Proceeds percentages set forth in Section 10(c)(ii).
(ii) Upon a termination of this Agreement by W50 pursuant to Sections 12(a)(i)
or 12(a)(iii) that results in a cancellation of the Festival, W50 shall be entitled to all
Recovery Funds (subject to any senior financing that Amplifi has agreed to pursuant to
Section 4(d), if applicable, and after payment of all the non-refundable or cancellable costs
and expenses of the production of the Festival incurred in compliance with this Agreement
and the Approved Budget) until it has recouped all of its documented, out-of-pocket costs
and expenses incurred in connection with the Festival, and then Amplifi shall be entitled
to any remaining Recovery Funds until it has received a return of the Principal Amount
and the Additional Principal Amount, if any, actually funded by Amplifi. After payments
of all amounts owed under this Section 12(c)(ii), any remaining Recovery Funds shall be
shared by Amplifi and W50 in accordance with the Festival Net Proceeds percentages set
forth in Section 10(c)(ii).
(iii) If a termination of this Agreement by W50 occurs pursuant to Sections
12(a)(i), 12(a)(iii) or 12(a)(vi), and W50 thereafter produces the Festival, then subject to
any senior financing that W50 obtains after such termination, Amplifi and W50 shall
remain entitled to the Festival Net Proceeds percentages set forth in Section 10(c); provided
that Amplifi's portion of the Festival Net Proceeds shall be reduced by any losses,
damages, liabilities or expenses suffered or incurred by W50 as a result of the events giving
rise to W50's termination of this Agreement.
(iv) All funds owed to a Party pursuant to Section 12(c)(i) or (ii) shall be paid
as soon as reasonably practicable, but not more than ten (10) business days after receipt of
such funds into the Festival Bank Account. W50 shall use commercially reasonable efforts
to seek, negotiate and obtain any available refunds from Vendors in the event of a
termination of this Agreement.
(d) Subject to Section 12(b), in the event that Amplifi (in the reasonable opinion of its
outside counsel) has the right to terminate this Agreement pursuant to Sections 12(a)(ii) or
12(a)(iv), Amplifi shall, as an alternative to termination of this Agreement, have the option (the
"Control Option") to take full control of the operation and production of the Festival by a notice
in writing to W50 and cause W50 and its officers and employees to cease all Festival-related
activity. If Amplifi chooses to exercise its Control Option, W50 shall (i) maintain in full force and
effect the License Agreement, (ii) either assign to Amplifi or continue to perform under any
Festival-related agreement to which W50 is a party, as reasonably directed by Amplifi, and (iii)
take such other actions or omit to take such actions as Amplifi shall reasonably direct that are
required to successfully produce the Festival. Provided that W50 performs its obligations set forth
in this Section 12(d), in the event Amplifi exercises its Control Option, W50 shall remain entitled
to its share of the Festival Net Proceeds, less any losses, damages, liabilities or expenses suffered
or incurred by Amplifi as a result of the events giving rise to Amplifi's right to exercise its Control
Option, as set forth in this Agreement.
(e) Any decision to cancel the Festival shall be jointly made in writing by the Parties.
13. Representations and Warranties.
(a) W50 hereby warrants and represents that:
(i) It has the full right, power and authority to enter into this Agreement and to
perform and fulfill all of the obligations to be rendered and satisfied by it hereunder, and to grant
all rights granted and purported to be granted to Amplifi herein. Further to the preceding sentence,
this Agreement has been duly executed by W50 and constitutes a valid and enforceable obligation
(ii) It is a New York limited liability company duly organized, validly existing
and in good standing under the laws of the state of its organization, and any authorizations and
actions necessary for this transaction have been obtained and taken, including, without limitation,
any consents required from the members of W50.
(iii) It will comply with any and all federal, state, and local laws, rules and
regulations in connection with its performance of its obligations under this Agreement.
(iv) W50 has not made or assumed, and will not hereafter make or assume, any
commitment, agreement or obligation that will or might (as reasonably foreseeable) conflict with
or impair its ability to perform its obligations hereunder.
(v) W50 has the sole and exclusive right to produce the Festival pursuant to the
terms of the License Agreement.
(vi) W50 represents and warrants that: (a) it has provided true, complete, and
accurate information to, and not knowingly withheld material information from, Amplifi
concerning its license of the Festival IP; (b) no third party has any right, title or interest in or to
the Festival IP; (c) its rights in and to the Festival IP are free and clear of any third party's claim
of ownership (excluding Woodstock Ventures LC), infringement, license or permission to use,
encumbrance, lien or other claim or threat, and that W50 has not received any such claim or threat;
(d) W50's and Amplifi's use of the Festival IP in accordance with the terms of this Agreement
will not violate the rights of any third party; and (e) the license of Festival IP granted herein does
not and will not conflict with any existing obligations or commitments of W50.
(b) Amplifi hereby warrants and represents that:
(i) Amplifi has the full right, power and authority to enter into this Agreement
and to perform and fulfill all of the obligations to be rendered and satisfied by it hereunder. Further
to the preceding sentence, this Agreement has been duly executed by Amplifi and constitutes a
valid and enforceable obligation of it;
(ii) Amplifi is a Delaware limited liability company duly organized, validly
existing and in good standing under the laws of the state of its organization, and any authorizations
and actions necessary for this transaction have been obtained and taken, including, without
limitation, any consents required from the stockholders of Amplifi;
regulations in connection with its performance of its obligations under this Agreement;
(iv) Amplifi has the financial ability to fully perform its obligations under this
Agreement; and
(v) Amplifi has not made or assumed and will not hereafter make or assume
any commitment, agreement or obligation that will or might (as reasonably foreseeable) conflict
with or impair its ability to perform its obligations hereunder.
(c) The Parties acknowledge the risks inherent in developing, producing, distributing
and marketing the Festival, including, without limitation, the possibility of cost overruns, lower
sales than anticipated, and loss of contributed financing, including, without limitation, the
Principal Amount. Amplifi acknowledges that this is a speculative investment and involves a high
degree of risk and that the W50 has no financial or operating history. There is no assurance that
Amplifi will earn a profit from its funding in the Festival nor is there any assurance that Amplifi
will recoup any of its Principal Amount so funded. Neither Party makes any representation or
warranty as to the amount of Festival Proceeds, if any, to be received from exploitation of the
(d) Except as expressly provided in this Section 13, each Party disclaims all other
warranties, express or implied, including the implied warranties of merchantability and fitness for
a particular purpose.
14. Force Majeure. Any delay or failure of either Party to perform its obligations under this
Agreement is excused to the extent that it is caused by an event or occurrence beyond its reasonable
control, including acts of God, actions by governmental authority (whether valid or invalid), fires,
floods, windstorms, explosions, riots, natural disasters, wars, sabotage or labor problems (each, a
"Force Majeure Event"), provided the Party claiming force majeure promptly notifies the other
Party of the event of force majeure, the anticipated duration of the event of force majeure, and the
steps being taken to remedy the failure, and uses reasonable diligence to remedy such failure.
15. Complimentary Tickets and Parking Passes. W50 and Amplifi shall each be entitled to 200
complimentary tickets to the Festival, 50 VIP packages for the Festival, and 100 parking passes
for each day of the Festival for the use of any guests invited by such Party. For purposes of clarity,
such limitations do not include any complimentary tickets, VIP packages or parking passes which
may be issued to the press, artists' guests, locals residing in the area, volunteers, industry insiders
and others on an as needed basis. In no event shall more than 10,000 complimentary tickets be
issued without the prior written approval of W50 and Amplifi.
16. Indemnification; Limitation of Liability.
(a) Each Party (the "Indemnifying Party") hereby agrees to defend (at the Indemnified
Party's election), indemnify and hold harmless the other Party and its respective affiliates
(including Woodstock Ventures LC in the case of W50), and their respective officers, directors,
employees, agents, successors, contractors, permitted assigns and customers (collectively, the
"Indemnified Parties") from and against any and all losses, damages, liabilities, deficiencies,
judgments, settlements, interest, awards, penalties, fines, costs, or expenses of whatever kind,
including reasonable outside attorneys' fees, fees and the costs of enforcing any right to
indemnification under this Agreement and the cost of pursuing any insurance providers, incurred
by any Indemnified Party, arising out or resulting from (i) the Indemnifying Party's actual or
alleged breach of its representations, warranties, covenants or agreements hereunder, or (ii) such
party's gross negligence or intentional misconduct, including without limitation acts of fraud, self-
dealing, kickbacks or bribery, in connection with the performance of its obligations under this
(b) Except with respect to indemnification obligations relating to third party claims
(including if owed to Woodstock Ventures LC), neither Party will be liable to the other Party for
any incidental, indirect, special, consequential, or punitive damages (including damages for loss
of use, business goodwill, revenue, or profit) arising out of or related to the performance or non-
performance of such Party's obligations under this Agreement.
(c) The amount of any loss for which indemnification is provided hereunder shall be
reduced by (i) any amounts actually received by the Indemnified Party in respect of the losses
forming the basis of such claim for recovery from a third party pursuant to any indemnification or
other similar right, and (ii) any amounts actually received by the Indemnified Party in respect of
the losses forming the basis of such claim for recovery from an insurer under any insurance policy.
Each Party shall take, and cause its Indemnified Parties to take, commercially reasonable steps to
mitigate any loss for which such Indemnified Party could reasonably be entitled to indemnification
under this Section 16 upon becoming aware of any event or circumstance that would be reasonably
expected to, or does, give rise thereto.
(d) The aggregate liability of each Party under this Agreement shall be limited to (i)
the insurance proceeds under the Insurance Policies and (ii) the aggregate amount of the Festival
Net Proceeds actually received by such Party.
(e) The Parties agree that (i) Woodstock Ventures LC shall have no liability, exposure
or obligation to Amplifi related to any actual or alleged breach, default, or violation by W50 under
this Agreement; (ii) Amplifi shall have no rights against Woodstock Ventures LC, and Woodstock
Ventures LC shall have no obligations to Amplifi, under or by virtue of this Agreement; (iii)
Amplify shall look solely to W50 for any claim, relief, remedy, compensation or recovery related
to any actual or alleged breach, default, or violation by W50 under this Agreement; (iv) there is no
privity of contract between Amplifi and Woodstock Ventures LC with respect to this Agreement;
(v) nothing in this Agreement shall expand W50's rights or reduce or limit W50's obligations
under the License Agreement; and (vi) Woodstock Ventures LC shall be deemed a third party
beneficiary of this provision and with respect to its rights under this Section 16.
(f) For purposes of clarity, Woodstock Ventures LC shall only be deemed an
"Indemnified Party" under this Section 16, and not an "Indemnifying Party."
17. Tax Treatment of Parties' Relationship.
(a) Solely for U.S. federal, state and local income tax purposes, the Parties' relationship
with respect to production of the Festival shall be deemed a partnership (the "Tax Partnership").
For the avoidance of doubt, this Agreement shall not be deemed to have created a separate
partnership (general or limited), limited liability company, corporation or other juridical entity for
any state law purposes other than tax purposes, and neither Party shall be deemed a partner (general
or limited), member, shareholder or other equity holder of any such business entity for state law
purposes other than tax purposes.
(b) Consistent with the treatment of the Parties' relationship as a partnership for income
tax purposes, the Parties shall cause the preparation and timely filing (including extensions) of all
tax returns required to be filed by the Tax Partnership pursuant to the Internal Revenue Code of
1986, as amended (the "Code"), as well as all other required tax returns in each jurisdiction in
which the Tax Partnership owns property or does business. Such tax returns shall be prepared by
a reputable nationally-recognized independent certified public accountant or other professional tax
return preparer to be mutually selected by the Parties (the "Festival Accountant"). Each Party shall
have the right to review and comment with respect to each such tax return at least thirty (30) days
prior to the due date for the filing thereof, and if either Party shall object to any item on any such
tax return, the other Party shall reasonably cooperate in having the Festival Accountant consider
such item in good faith. As soon as reasonably possible after the end of each calendar year during
the term of this Agreement, the Parties shall cause the Festival Accountant to deliver to each Party
IRS Schedule K-1 to Form 1065 and such other information with respect to the Tax Partnership as
may be necessary for the preparation of such Party's federal, state and local income tax returns for
such calendar year. Notwithstanding any provision hereof to the contrary, the fees and expenses
of the Festival Accountant shall be borne equally by the Parties, each of whom shall be obligated
to pay its 50% share of such fees and expenses to the Festival Accountant promptly upon such
Party's receipt of a copy of the invoice for such fees and expenses, whether such invoice is received
before, during or after production of the Festival and whether or not the Festival Proceeds and
Recovery Funds have already been disbursed to the Parties pursuant to Section 10 or 12 hereof.
(c) Consistent with the treatment of the Parties' relationship as a partnership for
income tax purposes, the Parties shall cause the Festival Accountant to establish on the books and
records of the Tax Partnership a capital account for each Party that shall be maintained in
accordance with Section 704 of the Internal Revenue Code of 1986, as amended (the "Code"), and
the Treasury Regulations promulgated thereunder. Each Party's transfers of funds toward
production of the Festival shall be deemed a contribution to the capital of the Tax Partnership, and
each Party shall be required to report its share of Tax Partnership items of taxable income, gain,
deduction, loss, credit and other tax items on its U.S. federal, state and local income tax returns,
as such items are reported to such Party on the Form 1065, Schedule K-1 to be furnished to such
Party by the Festival Accountant. The allocation of Tax Partnership items of income, gain,
deduction, loss and credit for income tax purposes generally shall follow the manner in which
Festival Proceeds and Recovery Funds are distributed between the Parties pursuant to Sections 10
and 12 hereof, provided, however, that such allocations shall in each instance be subject to the
applicable requirements of Section 704 of the Code and the Treasury Regulations promulgated
thereunder.
(d) In the event any federal, state or local income taxes are required to be withhold with
respect to any taxable income allocated to a Party pursuant to Section 17(c), the amount withheld
shall constitute an advance against current or future distributions to such Party or, failing current
or future distributions, a loan to such Party.
(e) Consistent with the treatment of the Parties' relationship as a partnership for income
tax purposes, the Parties hereby appoint Amplifi as the "partnership representative" within the
meaning of Section 6223(a) of the Code (the "Partnership Representative") and Matthew Hurley
as the sole person authorized to act on behalf of the Partnership Representative (the "Designated
Individual"). The Designated Individual can be removed at any time by the Parties. The Designated
Individual shall resign if it is no longer an employee or an officer of the Partnership Representative.
In the event of the resignation of the Partnership Representative, the Parties shall select a
replacement. In the event of the resignation or removal of the Designated Individual, the Parties
shall select a replacement. If the resignation or Parties' removal of the Partnership Representative
or Designated Individual occurs prior to the effectiveness of the resignation or removal under
applicable Treasury Regulations or other administrative guidance, the Partnership Representative
or Designated Individual that has resigned or been removed shall not take any actions in its
capacity as Partnership Representative, except as directed by the Parties.
(f) The Partnership Representative shall represent the Parties in connection with any
examination by a taxing authority of any tax returns filed by or on behalf of the Tax Partnership,
including any resulting administrative and judicial proceedings, and to expend funds from the
Festival Account for professional services and costs associated therewith. The Partnership
Representative shall promptly notify each Party if any tax return of the Tax Partnership is audited
and upon the receipt of a notice of final partnership administrative adjustment or final partnership
adjustment, and shall keep the Parties reasonably informed of the status of any tax audit and
resulting administrative and judicial proceedings. Without the consent of both Parties, the
Partnership Representative shall not extend the statute of limitations, file a request for
administrative adjustment, file suit relating to any Tax Partnership tax refund or deficiency or enter
into any settlement agreement with any taxing authority relating to items of income, gain, loss or
deduction of the Tax Partnership.
(g) To the extent permitted by applicable law and Treasury Regulations, the
Partnership Representative shall cause the Tax Partnership to annually elect out of the partnership
audit procedures enacted under Section 1101 of the Bipartisan Budget Act of 2015 (the "BBA
Procedures"). For any year in which applicable law and Treasury Regulations do not permit the
Tax Partnership to elect out of the BBA Procedures, then within forty-five (45) days of any notice
of final partnership adjustment, the Tax Partnership shall elect the alternative procedure available
under Section 6226 of the Code, and furnish to the Internal Revenue Service and each Party a
statement of such Party's share of any adjustment set forth in the notice of final partnership
(h) Neither Party shall treat any Tax Partnership item inconsistently on such Party's
federal, state or local income tax return with the treatment of the item on the Tax Partnership's
return. Any deficiency for taxes imposed on either Party (including penalties, additions to tax or
interest imposed with respect to such taxes and any taxes imposed pursuant to Section 6226 of the
Code) shall be paid by such Party and if required to be paid (and actually paid) from funds in the
Festival Account, shall be recoverable from such Party.
(i) Except as otherwise provided herein, the Partnership Representative shall have sole
discretion to make any determination regarding income tax elections it deems advisable on behalf
of the Tax Partnership, provided that such election is reasonable under the circumstances,
provided, further, that any tax election that has or is reasonably likely to have an adverse effect on
W50 shall require W50's prior written consent. The Partnership Representative shall be required,
on behalf of the Tax Partnership, to make an election under Section 754 of the Code if requested
in writing by either Party.
(a) This Agreement shall constitute the entire agreement between the parties in
connection with the subject matter hereunder and supersedes all prior agreements and
understandings pertaining hereto. No amendment or modification to this Agreement shall be valid
or binding on any party unless such amendment or modification is evidenced in writing signed by
the parties hereto.
(b) The parties agree and acknowledge that nothing about this Agreement constitutes a
public offering or a sale of a security and that this transaction is not subject to the laws of the
United States or any state related to the sale or acquisition of securities.
(c) The parties will execute and deliver to the other party any additional documents,
assignments or instruments (to be negotiated in good faith) which such other party may reasonably
require to fully evidence the intent and purpose of this Agreement.
(d) The Parties are independent contractors with respect to each other. Each Party is
not and shall not be deemed to be an employee, agent, partner, joint venturer, franchisee or legal
representative of the other for any purpose and shall not have any right, power or authority to
create any obligation or responsibility on behalf of the other.
(e) This Agreement shall be governed by the laws of the State of New York without
regard to the principles of conflicts of law.
(f) The parties agree that any and all disputes, claims or controversies arising out of or
related to this Agreement, including any claims under any statute or regulation ("Disputes"), shall
be submitted first to non-binding mediation. If the Disputes are not resolved through mediation,
then, upon the election of either party, the Disputes shall be submitted for binding arbitration.
Unless the parties agree otherwise, any mediation and/or arbitration shall take place in the State of
New York, New York County, and shall be administered by, and pursuant to the rules of, the
American Arbitration Association ("AAA"). Disputes shall be arbitrated on an individual basis.
The arbitrator's authority to resolve Disputes and to make awards is limited to Disputes solely
between W50, on the one hand, and Amplifi on the other hand, and is subject to the limitations of
liability set forth above. Furthermore, Disputes brought by any party hereto against the others may
not be joined or consolidated in arbitration with Disputes brought by or against any third party,
unless agreed to in writing by all parties. No arbitration award or decision shall be given preclusive
effect as to issues or claims in any dispute with anyone who is not a party to the arbitration. Should
any portion of this Section 17(f) be stricken from this Agreement or deemed otherwise
unenforceable, then this entire Section 17(f) shall be stricken from this Agreement. The provisions
of this Section 17(f) may be enforced in a court of competent jurisdiction.
(g) The parties shall keep the terms of this Agreement strictly confidential except: (i)
to the extent disclosure is reasonably required to effectuate this Agreement or to finance or produce
the Festival; (ii) to the extent disclosure is required pursuant to court order or applicable laws or
regulations; and (iii) to the disclosing party's professional representatives. The disclosing party
shall inform any person to whom it reveals confidential information hereunder of the confidential
nature of such information, and shall be liable for any disclosure by a third party which, had the
disclosing party made such disclosure, would have been a breach of this Agreement.
(h) This Agreement shall not be assignable by either Party without the prior written
consent of the other Party; provided, that following full funding of the Principal Amount in
accordance with the terms of this Agreement, Amplifi may assign this Agreement to any controlled
affiliate of Amplifi within the Dentsu Aegis Network as of the date hereof by providing written
notice thereof to W50. Any permitted assignment by a party shall require the assignee to assume
all obligations of the assignor in writing, after which the assignor shall remain secondarily liable
hereunder. Any assignment in violation of this section shall be void from the making thereof and
of no force or effect. This Agreement shall inure to the benefit of the parties and their respective
successors and permitted assigns.
(i) The waiver of any breach of this Agreement shall not be deemed to be a waiver of
any other breach of this Agreement (or any provision hereof). If any provision of this Agreement
is or shall be deemed to be invalid, illegal or unenforceable, such provision shall be deemed
modified or deleted, only to the extent necessary to render such provision (and the remainder of
this Agreement, if otherwise affected) valid, legal and enforceable, and so as modified, this
Agreement shall continue in full force and effect.
(j) If any provision of this Agreement is determined to be invalid under any applicable
law, rule, or regulation, it is to that extent to be deemed omitted, and the balance of the Agreement
will remain enforceable.
(k) All notices will be in writing and will be deemed to be delivered upon actual receipt
(or refusal of delivery) when mailed by certified mail, postage prepaid, return receipt requested,
when sent by electronic mail with confirmed receipt or when sent by recognized overnight or same-
day commercial courier. All notices will be directed to the Parties at the respective addresses given
below the signature line of this Agreement or to such other address as either Party may, from time
to time, designate by notice to the other Party.
(l) This Agreement may be signed in counterparts, by computer data file (e.g., pdf-
file) or manual signature and each such counterpart shall constitute an original document and all
such counterparts, taken together, shall constitute one and the same instrument.
(m) Where any action under this Agreement requires the Parties' mutual approval or
agreement, the Parties shall act in good faith to come to mutual agreement on such matter without
unreasonable delay.
(n) In the event of any termination or expiration of this Agreement for any reason, all
provisions of this Agreement whose meaning requires them to survive shall survive the expiration
or termination of this Agreement.
19. Future Financing Rights.
(a) If at any time W50 seeks a new opportunity to produce further revenue relating to
the Festival that is not subject to this Agreement (e.g., a partnership with a publisher to produce
"Woodstock 50th Anniversary Concert Magazine") which requires equity or working capital
funding (each, a "New Opportunity"), W50 will exclusively offer to Amplifi (the "Opportunity
Offer") the right to become the lead financier of the New Opportunity. The Opportunity Offer
shall be made in writing to Amplifi and Amplifi shall have ten (10) days from receipt of the
Opportunity Offer to respond in writing to the Opportunity Offer. If Amplifi rejects the
Opportunity Offer (or fails to respond in writing in such ten-day period), then W50 shall have no
further obligation to Amplifi with respect to such New Opportunity (but the provisions of this
Section 19 shall continue to apply for any other New Opportunity).
(b) If Amplifi accepts the Opportunity Offer, W50 and Amplifi will exclusively
negotiate in good faith for a period of thirty (30) days from the day of Amplifi's acceptance of the
Opportunity Offer with respect to a mutually agreeable, non-binding letter of intent (the
"Opportunity LOI"), which shall contain the basic commercial terms pursuant to which Amplifi
shall finance the New Opportunity. If the parties, acting in good faith, cannot agree on the terms
of such Opportunity LOI within the time period prescribed above, then W50 shall have no further
obligation to Amplifi with respect to such New Opportunity (but the provisions of this Section 19
shall continue to apply for any other New Opportunity).
(c) If the parties come to agreement on the terms of such Opportunity LOI, then W50
and Amplifi will continue to exclusively negotiate in good faith for a period of sixty (60) days
from the date of execution of the Opportunity LOI with respect to final, definitive transaction
documents for the financing of the New Opportunity (the "Opportunity Definitive Documents").
If the parties, acting in good faith, cannot agree on the terms of the Opportunity Definitive
Documents within the time period prescribed above, then W50 shall have no further obligation to
Amplifi with respect to such New Opportunity (but the provisions of this Section 19 shall continue
to apply for any other New Opportunity).
(d) At no time prior to or during the foregoing exclusive negotiation periods will W50
negotiate with any third party entity or person (including representatives or agents for such third
party entity) for any New Opportunity. The rights and obligations in this Section 19 shall survive
for five (5) years after the date of this Agreement, except if this Agreement is terminated by W50
pursuant to Section 12(a)(i), (iii) or (vi).
[Remainder of Page Intentionally Left Blank]
CAUTION: THIS DOCUMENT HAS NOT YET BEEN REVIEWED BY THE COUNTY CLERK. (See below.)
At IAS Part __ of the Supreme
Court of the State of New York, held
in and for the County of New York,
at the Courthouse thereof, located at
60 Centre Street, New York, New
York 10007, on the ____ day of
HON: __________________________
: Index No. ______________/2019
: [PROPOSED]
: ORDER TO SHOW CAUSE
v. : FOR CPLR § 7502(c) INJUNCTION
DENTSU INC, DENTSU AEGIS :
NETWORK, and AMPLIFI LIVE, LLC, :
---------------------------------------------------------------x
Upon reading and filing the accompanying Verified Petition, dated May 8, 2019, and the
Exhibit annexed thereto, together with the accompanying Memorandum of Law of petitioner
Woodstock 50, LLC ("Petitioner" or "W50"), and the Emergency Affirmation of Marc E.
Kasowitz, Esq., dated May 8, 2019, and good cause having been shown, it is hereby ORDERED
that Respondents Dentsu Inc., Dentsu Aegis Network, and Amplifi Live, LLC (collectively
"Dentsu"), appear and show cause before this Court at the Commercial Division Part __, at the
Courthouse located at 60 Centre Street, New York, New York, on the ___ day of May, 2019 at
____ o'clock in the _______ or as soon thereafter as counsel can be heard, why an order should
not be made pursuant to CPLR § 7502(c), granting a preliminary injunction in aid of arbitration
as set forth below, and pending the hearing and determination of the motion for such relief, IT IS
FURTHER ORDERED that Dentsu, and all persons and agents acting in concert with or on
behalf of Dentsu are temporarily restrained as follows:
a. Dentsu shall cease all communications relating to the Festival, including with
b. Dentsu shall return to the Festival Bank Account (as defined in the
Agreement) within 24 hours of the signing of an Order all funds withdrawn
from the Account, in an amount no less than $17,800,000, plus any other
access to the funds in the Account, which W50 may use solely for Festival-
c. Dentsu shall cooperate with W50 in connection with W50's continued
planning of the Festival, including providing reasonable consents and
approvals;
d. Dentsu shall produce to W50 all records relating to (i) the removal of funds
from the Festival Bank Account referred to in (b) above; and
(ii) communications between Dentsu and any person or entity involved in the
e. awarding W50 such other and further relief as the Court may deem just and
proper.
IT IS FURTHER ORDERED that, pending resolution by the American Arbitration
Association, Dentsu, and all persons and agents acting in concert with or on behalf of Dentsu are
preliminarily enjoined as follows:
And it is further:
ORDERED, that service of a copy of this Order, together with the papers upon which it
is based, on Marc L. Greenwald, Esq. of Quinn Emanuel Urquhart & Sullivan LLP, counsel for
respondents, by e-mail and overnight mail on or before May ___, 2019, shall be deemed good
and sufficient service; and it is further
ORDERED, that Respondent's answering papers, if any, shall be served by filing
electronically copies of the same via the Court's Electronic Case Filing (ECF) system no later
than 5 P.M. May ___, 2019; and it is further
ORDERED that Petitioner's reply papers, if any, shall be served by filing electronically
copies of the same via the Court's Electronic Case Filing (ECF) system no later than May ___,
J.S.C.
: Index No. ____________/2019
v. :
: Assigned to:
EMERGENCY AFFIRMATION OF MARC E. KASOWITZ
Marc E. Kasowitz, an attorney duly admitted to practice law in the State of New York,
affirms the following under penalty of perjury:
1. I am a partner with the law firm of Kasowitz Benson Torres LLP, attorneys for
Woodstock 50, LLC ("Petitioner" or "W50"). I submit this affirmation in support of W50's
application for a temporary restraining order and preliminary injunction against Respondents
Dentsu Inc., Dentsu Aegis Network and Amplifi Live, LLC (collectively, "Dentsu"). I am fully
familiar with the pleadings and proceedings in this matter.
2. As more fully set forth in the accompanying Verified Petition, dated May 8, 2019,
and the memorandum of law, pursuant to CPLR § 7502(c), W50 seeks for an Order of this Court
(i) enjoining Dentsu from violating the terms of the parties' Financing and Production
Agreement (the "Agreement"), including requiring Dentsu immediately to return nearly $18
million in misappropriated funds from the Woodstock 50th Anniversary Festival ("Festival")
bank account and provide W50 with access to the funds in the account, which W50 may use
solely for Festival-related expenses; and (ii) enjoining Dentsu from disparaging W50, interfering
accepted for filing by the County Clerk. 1 of 6
with its contracts with performers and others, and undermining the Festival, pending arbitration
in New York before the American Arbitration Association ("AAA") in accordance with the
terms of the parties' Agreement.
3. For the reasons set forth more fully in the accompanying Verified Petition and
memorandum of law, Petitioner requests that the Court treat this application on an emergency
basis. In just over 100 days, W50 will be staging the Festival, with tens of thousands of
concertgoers enjoying more than 75 performers over the course of the 3-day event in Watkins
Glen, New York. Dentsu's wanton and illegal conduct -- including its breaches of its Agreement
with W50, its theft of Festival funds, and its tortious interference with W50's contracts with the
performers and others -- threatens to destroy the Festival.
4. Given the urgency of completing the preparations and logistics to produce the
Festival which will be held in three short months, the requested relief is critically necessary
pending the contractually-required initial AAA mediation and then arbitration of the disputes
between the parties. Without this injunctive and interim relief, any award granted in the
arbitration will be ineffectual because by the time such relief is granted, Dentsu will have
successfully sabotaged W50's production of the Festival in plain violation of the Agreement and
New York law.
5. Dentsu has: (i) breached its obligations under the Agreement to cooperate with
W50 (Agreement, ¶ 2(a)), to allow W50 to make financial decisions (id., ¶ 3(c)), to attend budget
meetings (id., ¶ 3(d)), and to provide monthly balance sheets and access to financial records (id.,
¶¶ 6(e), 7(c)); (ii) further breached the terms of the Agreement by wrongfully purporting to
exercise the Control Option and cancel the Festival (id., ¶ 12), and dispute resolution and
confidentiality (id., ¶ 12); (iii) tortiously interfered with W50's contracts with Festival
stakeholders; and (iv) converted assets earmarked for the Festival.
6. Respondents engaged in such wrongful conduct and repeated breaches of the
parties' Agreement when, among other things, they:
(1) wrongfully invoked the so-called "Control Option" in the parties' Agreement to
attempt to take control of the Festival's production and exclude W50 from any further role
in the Festival for the sole and unauthorized purpose of cancelling the Festival;
(2) issued a press release to the world on April 29, 2019 advising that it had taken
control of the Festival and was cancelling it due to concerns for safety, throwing the
production of the Festival into doubt, causing concern for every fan, the Town of Watkins
Glen, Schuyler County, the State of New York, and every performer, producer and party
under contract;
(3) misappropriated $17.8 million in the Festival Bank Account that was expressly
required to be spent only on Festival expenses, which Dentsu could not take without joint
agreement by the parties, at one of the most critical junctures in the production schedule;
(4) directly contacted the agents of the performers that contracted with W50 to headline
or participate in the Festival, informed the performers that the event is cancelled,
encouraged them to terminate their agreements with W50 and not perform, promised to
indemnify the performers, and even implied to certain performers that if they play ball with
Dentsu and follow its demand to breach their agreement with W50, that Dentsu may find
a place for those performers to perform at the 2020 Summer Olympics in Tokyo, for which
Dentsu is a major sponsor.
7. W50 currently suffers, and will continue to suffer, immediate and irreparable
harm because of Dentsu's breaches, which provides a legal basis for granting a preliminary
injunction. Even though Dentsu is in clear violation of the Agreement, W50 cannot stop
Dentsu's misconduct in time to save the Festival unless this Court preserves the status quo ante
while W50 seeks to enforce its rights before the AAA, as required by the Agreement. Absent
this relief, Dentsu's illegal and outrageous attack on the Festival and on W50 will have
succeeded because W50 will be unable to produce the Festival, secure the permits, retain the
talent, and attract the ticket purchasers. The Festival's and W50's opportunities and identifiable
funds will have been lost, and their reputations irreparably harmed.
8. Accordingly, Petitioner seeks an order from this court requiring Dentsu to: (i)
cease all communications relating to the Festival, including with the media, and Festival
stakeholders, including state and county officials, venue operators, local vendors, community
representatives, insurers, producers, and talent agencies and performers; (ii) return to the
Festival Bank Account (as defined in the Agreement) within 24 hours of the signing of an Order
all funds withdrawn from the Account, in an amount no less than $17,800,000, plus any other
funds removed for non-Festival related purposes, and provide W50 with access to the funds in
the Account, which W50 may use solely for Festival-related expenses; (iii) cooperate with W50
in connection with W50's continued planning of the Festival, including providing reasonable
consents and approvals; (iv) produce to W50 all records relating to (A) the removal of funds
from the Festival Bank Account referred to in (ii) above; and (B) communications between
Dentsu and any person or entity involved in the planning or production of the Festival from
April 1, 2019 to date; as well as (v) such other and further relief as the Court may deem just and
9. Unless Respondents are immediately enjoined, the damage to W50's business,
goodwill and reputation will be permanent, as it will be impossible for W50 to reverse the
damage done by Respondents and successfully produce the festival.
10. As set forth in Section 202.7(f) of the Uniform Rules for the New York State Trial
Courts, I will provide notice to counsel to Dentsu that W50 has commenced a proceeding and
intends to seek emergency relief from this Court. I will provide such notice by email dated
May 8, 2019, attaching the verified petition, memorandum of law, emergency affirmation, order
to show cause and related papers seeking the issuance of a preliminary injunction in aid of
arbitration, and an interim temporary restraining order. This will give notice to Dentsu sufficient
to permit them an opportunity to appear and contest the application.
11. No previous application for the relief requested herein has previously been
made to this or any other Court.
By: /s/ Marc E. Kasowitz
Certification of Word Count
The undersigned hereby certifies that the foregoing EMERGENCY AFFIRMATION OF
MARC E. KASOWITZ contains 1235 words according to the word count of the word-processing
software used to prepare the response, excluding the caption, table of contents, table of
authorities, and signature block.
/s/ Marc E. Kasowitz
Attorney for Petitioner
: Index No. __________/2019
v. : Assigned to:
MEMORANDUM OF LAW IN SUPPORT OF APPLICATION FOR
CPLR § 7502(c) INJUNCTION IN AID OF ARBITRATION
PRELIMINARY STATEMENT ................................................................................................. 1
STATEMENT OF FACTS........................................................................................................... 4
A. The Woodstock Movement – Then and Now ..........................................................4
B. W50 and Dentsu Enter Into Their Agreement to Produce The Festival ..................5
C. Planning For The Festival Was Proceeding Apace..................................................6
D. Dentsu's Unprovoked Attack on The Festival and W50 .........................................7
ARGUMENT ................................................................................................................................ 9
I. THE ARBITRATION AWARD WILL BE RENDERED INEFFECTUAL
WITHOUT INJUNCTIVE RELIEF ..................................................................................11
II. W50 WILL SUFFER IMMEDIATE AND IRREPARABLE HARM ABSENT
INJUNCTIVE RELIEF PENDING ARBITRATION .......................................................12
A. W50 Will Suffer Irreparable Harm to its Goodwill and Reputation......................12
B. W50 Will Suffer Irreparable Harm Through the Loss of a Unique
Opportunity............................................................................................................13
C. W50 Will Suffer Irreparable Harm Based on Loss of Festival Account
Funds......................................................................................................................14
III. W50 IS LIKELY TO SUCCEED ON THE MERITS .......................................................15
A. Dentsu Repeatedly Breached the Agreement ........................................................16
B. Dentsu Tortiously Interfered with W50's Contracts with Artists and
Stakeholders...........................................................................................................18
C. Dentsu Engaged in Commercial Defamation and Disparagement ........................19
IV. THE BALANCE OF EQUITIES FAVORS GRANTING INJUNCTIVE
RELIEF TO W50...............................................................................................................21
CONCLUSION ........................................................................................................................... 23
This is a copy of a pleading filed electronically pursuant toi New York State court rules (22 NYCRR §202.5-b(d)(3)(i))
TABLE OF AUTHORITIES
Cases Page(s)
Amity Loans, Inc. v. Sterling Nat. Bank & Tr. Co. of N.Y.,
177 A.D.2d 277 (1st Dep't 1991) ......................................................................................14, 15
Banco Popular N. Am. v. Lieberman,
75 A.D.3d 460 (1st Dep't 2010) ..............................................................................................20
Bd. of Higher Educ. of the City of N. Y. v. Marcus,
63 Misc.2d 268 (Sup. Ct. Kings Cnty. 1970)...........................................................................13
CanWest Global Commc'n Corp. v. Mirkaei Tikshoret Ltd.,
9 Misc.3d 845 (Sup. Ct. N.Y. Cnty. 2005) ..............................................................................13
Cove v. Rosenblatt,
148 A.D.2d 411 (2d Dep't 1989) .............................................................................................10
Credit Index, L.L.C. v. Riskwise Int'l L.L.C.,
282 A.D.2d 246 (1st Dep't 2001) ............................................................................................21
DAR Assoc., Inc. v. Uniforce Servs., Inc.,
37 F. Supp.2d 192 (E.D.N.Y. 1999) ........................................................................................22
DePina v. Educ. Testing Serv.,
31 A.D.2d 744 (2d Dep't 1969) .........................................................................................21, 22
Destiny USA Holdings, LLC v. Citigroup Global Mkts. Realty Corp.,
69 A.D.3d 212 (4th Dep't 2009)..................................................................................12, 13, 14
Drug Research Corp. v. Curtis Publ'g Co.,
7 N.Y.2d 435 (1960) ................................................................................................................20
Engelhardt v. Fessia,
31 Misc. 2d 127 (Sup. Ct. N.Y. Cnty. 1961) ...........................................................................10
Five Star Dev. Resort Comty., LLC v. iStar RC Paradise Valley LLC,
No. 09 CIV. 2085 (LTS), 2010 WL 1005169 (S.D.N.Y. Mar. 18, 2010)................................16
Four Times Square Assocs. v. Cigna Invs., Inc.,
306 A.D.2d 4 (1st Dep't 2003) ................................................................................................12
Graham v. Bd. of Sup'rs, Erie Cnty.,
49 Misc.2d 459 (Sup. Ct. Erie Cnty. 1966) .............................................................................10
H.E. Allen Mfg. Co. v. Smith,
224 A.D. 187 (4th Dep't 1928)................................................................................................21
This is a copy of a pleading filed electronically pursuant toii New York State court rules (22 NYCRR §202.5-b(d)(3)(i))
Interoil LNG Holdings, Inc. v. Merrill Lynch PNG LNG Corp.,
60 A.D.3d 403 (1st Dep't 2009) ..................................................................................10, 11, 12
Kevin Spence & Sons, Inc. v. Boar's Head Provisions Co.,
5 A.D.3d 352 (2d Dep't 2004) .................................................................................................19
Klein, Wagner & Morris v. Lawrence A. Klein, P.C.,
186 A.D.2d 631 (2d Dep't 1992) .......................................................................................21, 22
Kronos, Inc. v. AVX Corp.,
81 N.Y.2d 90 (1993) ..........................................................................................................18, 19
Lesron Junior, Inc. v. Feinberg,
13 A.D. 2d 90 (1st Dep't 1961) ...............................................................................................13
McLaughlin, Piven, Vogel, Inc. v. W.J. Nolan & Co.,
Project Orange Assocs. v. GE Int'l, Inc.,
23 Misc. 3d 764 (Sup. Ct. N.Y. Cnty. 2009) .....................................................................11, 12
Second on Second Café v. Hing Sing Trading,
Seitzman v. Hudson River Assocs.,
Space Imaging Europe Ltd. v. Space Imaging L.P.,
No. 98 CIV. 2291 (DC), 1998 WL 190356 (S.D.N.Y. Apr. 21, 1998)....................................14
Swope v. Melian,
35 A.D.2d 981,981 (2d Dep't 1970) ........................................................................................15
Terrell v. Terrell,
Tom Doherty Assocs. v. Saban Entm't, Inc.,
60 F.3d 27 (2d Cir. 1995).........................................................................................................14
Tucker v. Toia,
54 A.D.2d 322 (4th Dep't 1976)..............................................................................................15
Van-Go Transp. Co. v. N. Y. City Bd. of Educ.,
971 F. Supp. 90 (E.D.N.Y. 1997) ......................................................................................19, 20
VisionChina Media Inc. v. S'holder Representative Servs., LLC,
109 A.D.3d 49 (1st Dep't 2013) ..............................................................................................16
This is a copy of a pleading filed electronically pursuant toiiiNew York State court rules (22 NYCRR §202.5-b(d)(3)(i))
Voyiatgis v. Lelekakis,
59 Misc. 3d 1225(A) (N.Y. Sup. Ct. Queens Cty. 2018).........................................................13
W. Willow Realty Corp. v. Taylor,
23 Misc. 2d 867 (Sup. Ct. Rockland Cnty. 1960)....................................................................21
Witham v. VFinance Invs., Inc.,
17 Misc. 3d 1136(A), (Sup. Ct. N.Y. Cnty. 2007), aff'd, 52 A.D.3d 403 (1st
Dep't 2008) ..............................................................................................................................11
Yesner v. Spinner,
765 F. Supp. 48 (E.D.N.Y. 1991) ............................................................................................20
Other Authorities
CPLR § 7502(c) ...............................................................................................................1, 9, 10, 11
This is a copy of a pleading filed electronically pursuant toivNew York State court rules (22 NYCRR §202.5-b(d)(3)(i))
Petitioner Woodstock 50, LLC ("W50") respectfully submits this memorandum in
support of its urgent application, pursuant to CPLR § 7502(c), for an Order (i) enjoining
respondents Dentsu Inc., Dentsu Aegis Network, and Amplifi Live, LLC (collectively, "Dentsu")
from violating the terms of the parties' Financing and Production Agreement (the "Agreement"),
including requiring Dentsu immediately to return nearly $18 million in misappropriated funds
from the Woodstock 50th Anniversary Festival ("Festival") bank account and provide W50 with
access to the funds in the account, which W50 may use solely for Festival-related expenses; and
(ii) enjoining Dentsu from disparaging W50, interfering with its contracts with performers and
Arbitration Association in accordance with the terms of the parties' Agreement, a copy of which
is annexed as Exhibit A to the Verified Petition.
PRELIMINARY STATEMENT
In just over 100 days, W50 will be staging the Festival commemorating the fiftieth
anniversary of Woodstock, with tens of thousands of concertgoers enjoying more than 75
performers over the course of the 3-day event in Watkins Glen, New York. W50 has been
working for months with a wide-ranging cast of musical talent and concert-staging partners to
plan the Festival, which will be a musical and cultural event that will stand as a spectacular
tribute to the original Woodstock festival and its unique place in American cultural history.
Early last week, W50 learned for the first time from press reports that its financial partner,
Dentsu, was announcing that Dentsu was unilaterally cancelling the Festival -- something that
Dentsu has no legal right to do.
W50 was blindsided by Dentsu's announcement, and shocked and outraged that Dentsu
claimed the unilateral right to cancel the Festival -- an action that is expressly barred by the
parties' Agreement. Dentsu's sabotage did not stop with its unauthorized and improper
cancellation announcement. Dentsu also emptied the Festival's bank account, taking all of the
$17.8 million earmarked for Festival production costs, an action that also clearly violated
Dentsu's Agreement with W50.
Dentsu then rapidly intensified its campaign to destroy the Festival by actively contacting
numerous stakeholders, including producers, performers, and other Festival vendors, inducing
and/or encouraging them to breach their contracts with W50, even though the performers had
already been fully paid for their participation in the event and remained obligated to W50 to
As Dentsu was carrying out its inexplicable plot to destroy the Festival, Dentsu spoke to
numerous media outlets to spread its false narrative that it had the right to, and had, cancelled the
Festival, and that Dentsu's cancellation announcement was the result of W50's purported
mismanagement of the project and breaches of the Agreement. Dentsu perpetuated this barrage
of negative, false press reports for one purpose: to ensure that the Festival could not go forward.
Dentsu's statements to the press, like its unlawful taking of the Festival's nearly $18 million in
cash, are calculated to scare off performers and vendors and other stakeholders, to scare off
concertgoers, and to make the production of the Festival a practical impossibility. Dentsu's
actions have caused a worldwide uproar over its efforts to kill the Festival's commemoration of
one of the most iconic cultural events of the 20th century.
Notwithstanding Dentsu's outrageous conduct, W50 has the right to, and fully intends to,
produce the Festival so it is a great success. The only true impediments to that success are
Dentsu's ongoing interference with W50's contractual right to produce the Festival, Dentsu's
theft of the Festival's funds, and Dentsu's active effort to disparage W50 and the Festival
through lies and mischaracterizations intended to destroy W50's business relationships and
ability to produce the Festival. W50 seeks the emergent relief requested herein to preserve the
status quo ante pending the appointment of a mediator, and then arbitrators, as provided for in
the dispute resolution process set forth in the Agreement.
The Festival is unique -- the fiftieth Anniversary of Woodstock only comes once, and
W50's inability to stage the Festival cannot be adequately replaced with money damages. Not
only will there never be another opportunity to mark the fiftieth anniversary of Woodstock, but
should Dentsu be permitted to wantonly destroy this Festival, it will forever damage the
Woodstock name, rendering it difficult if not impossible to stage future commemorative events.
Thus, W50 seeks an order from this Court granting a preliminary injunction in aid of arbitration,
and pending the hearing and determination of the motion, a temporary restraining order requiring
a) Dentsu cease all communications relating to the Festival, including with
b) Dentsu return to the Festival Bank Account (as defined in the Agreement)
within 24 hours of the signing of an Order all funds withdrawn from the
Account, in an amount no less than $17,800,000, plus any other funds
removed for non-Festival related purposes, and provide W50 with access
c) Dentsu cooperate with W50 in connection with W50's continued planning
d) Dentsu produce to W50 all records relating to (i) the removal of funds
(ii) communications between Dentsu and any person or entity involved in
the planning or production of the Festival from April 1, 2019 to date; and
e) awarding W50 such other and further relief as the Court may deem just
The facts set forth in the accompanying Verified Petition are incorporated herein by
reference, and summarized in relevant part below.
A. The Woodstock Movement – Then and Now
When the first Woodstock Music and Art Fair was held on August 15-18, 1969, it
celebration of art, music, and community. The original Woodstock festival cemented its place in
history through its focus on cooperation, activism, and harnessing the arts for social change. The
spirit of the "Woodstock movement" has endured across the festival's five-decade history, as a
symbol of perseverance in the face of adversity.
In January 2019, W50 announced that it would produce the Festival this coming August
as a celebration of, and spiritual successor to, the original Woodstock festival. The Festival will
bring together a mixture of legacy bands and current stars in a festival lineup that includes
numerous top-level performers such as Jay-Z, Miley Cyrus, and Dead & Co., along with Carlos
Santana and John Fogerty, who performed at the original 1969 Woodstock concert. With a star-
studded lineup and the support the State of New York, Schuyler County and the Town of
Watkins Glen, all of which have devoted substantial resources to assist with planning efforts, the
Festival is expected to have a tremendously favorable, multi-million dollar impact on the local
economy of Watkins Glen and the larger region.
Hearkening back to the original Woodstock festival, this year's fiftieth anniversary event
benefits from key partnerships with activist organizations like Head Count, which registers
young voters. W50 has also sought out socially-conscious performers who use their voices to
spur change.
B. W50 and Dentsu Enter Into Their Agreement to Produce The Festival
On November 2, 2018, W50 and Dentsu signed the Agreement to produce the Festival
together. The Agreement provides for W50 and Dentsu to move forward to jointly produce the
Festival in good faith, with W50 making its "Woodstock" trademarks for the Festival available
for use in "joint production of the Festival by W50," and Dentsu being the principal financing
partner for the Festival. (Agreement, ¶¶ 2, 4, 8, 18(m).) Amplifi Live, LLC is Dentsu's
designated corporate signatory to the Agreement. The Agreement provides for Amplifi's parent
Dentsu to be directly involved, including receiving credit for the production. The Agreement
thus provides that Dentsu is "to receive 'in association with' credit wherever W50's name is
listed as a producer of the Festival in marketing or advertising materials relating to the Festival."
(Id., ¶ 9(a) (Credits).)
The Agreement requires prior written approval by both W50 and Dentsu for certain major
decisions. Dentsu was required to "cooperate" and "meaningfully consult" with W50 on "all
material business decisions" concerning the Festival. (Id., ¶¶ 2(a), (b); 7(a).) The Agreement
also expressly states that the Festival could not be cancelled unilaterally by one of the parties,
stating, "Any decision to cancel the Festival shall be jointly made in writing by the Parties."
(Id., ¶ 12(e) (emphasis added).) No such joint decision was ever made, much less memorialized
in a writing. Indeed, to the contrary, at every point in time, W50 has stated its intention that the
Festival must go on.
Under the terms of the Agreement, Dentsu was required to deposit money for the
Festival's production into the Festival bank account, and pay Festival production costs from the
Festival bank account ("Festival Bank Account"). (Id., ¶ 4.) Dentsu is also specifically barred
from withdrawing funds from the Festival Bank Account for purposes other than producing
the Festival. (Id., ¶ 6(a).) Dentsu further acknowledged that "W50 has no financial or operating
history" and that "[t]here is no assurance that Amplifi will recoup any of its Principal Amount so
funded." (Id., ¶ 13(c).)
The Agreement provides that it can be terminated for, among other reasons, Dentsu's
misappropriation of funds from the Festival Bank Account or commission of fraud in connection
with the Festival's production. (Id., ¶ 12.) Even if the Agreement is properly terminated by
either party, it contemplates that the Festival will continue to be produced. (Id., ¶¶ 12(c)(iii),
12(d).)
C. Planning For The Festival Was Proceeding Apace
In the months since the signing of the Agreement, W50 has worked diligently and well to
produce the Festival. W50 or its agents have secured contracts with more than 75 top-level
performers, and have worked on permits, ticket sale strategies, logistics, promotion and other
requisites for the Festival. W50 has worked closely with state and county officials on permitting,
selecting and booking the venue, and doing outreach to businesses and landowners surrounding
the venue and interested community members.
Dentsu and W50 also entered into an Event Production Agreement with Superfly Event
Services, LLC ("Superfly"), a company experienced in providing production services for first-
class outdoor festivals, such as Bonnaroo and Outside Lands. Until very recently, Superfly had
been working effectively to assist W50 in producing the Festival. W50 suspects that Dentsu has
undermined the relationship with Superfly inducing it to threaten to terminate its production
Prior to Dentsu's recent sabotage, W50 and its agents have been very successful in lining
up and signing the talent to perform at the Festival. To that end, W50, in its own name, entered
into binding contracts with each of the more than 75 performers. Those contracts essentially
required pre-payment of the performers' performance fees. Collectively, the performers have
been paid a total of some $32 million.
D. Dentsu's Unprovoked Attack on The Festival and W50
W50 was thus proceeding apace with planning and implementing key logistics to produce
the Festival. Though there were significant issues yet to be worked out, as with any major
production, the parties and their professionals were actively engaged in cooperatively addressing
those matters.
However, some six weeks ago, as key steps in the production schedule approached,
Dentsu began raising false, pretextual complaints about the planning. As W50 was working
diligently to ensure that the Festival would be produced successfully, Dentsu secretly decided to
abandon, and then sabotage the Festival to ensure that it would never happen.
As part of that undisclosed scheme to terminate the Agreement and the Festival, Dentsu
began interfering with the planning and refusing to cooperate in authorizing necessary payments.
Then Dentsu had its lawyers write letters complaining of alleged material breaches of the
Agreement by W50. These allegations were all false. W50 promptly refuted them in writing,
noting in detail the falsity of the claims. But Dentsu had already hatched its plan and had no
interest in the truth, or in honoring the Agreement.
On Monday, April 29, Dentsu staged its attack on W50 and the Festival. Dentsu had its
lawyers write two letters to W50, the first claiming that though Dentsu purportedly had the right
to terminate the Agreement for cause, Dentsu was instead electing to invoke the so-called
"Control Option" in the parties' Agreement that supposedly permitted Dentsu to take control of
the Festival's production and exclude W50 from any further role in the Festival. That position
was directly contrary to the terms of the Agreement. The second letter from Dentsu's lawyers
advised that pursuant to Dentsu's Control Option, Dentsu was immediately cancelling the
Festival. That too is absolutely contrary to the express terms of the parties' Agreement, which
unambiguously provides that any cancellation of the Festival must be a joint written decision by
W50 and Dentsu.
Then, Dentsu issued a press release to the world advising that it had taken control of the
Festival and was cancelling it due to concerns for safety. The press release was invalid,
however, throwing the production of the Festival into doubt, causing concern around the world
and of course for every fan, the Town of Watkins Glen, Schuyler County, the State of New York,
and every performer, producer and party under contract.
Then, in further violation of the Agreement, Dentsu absconded with the $17.8 million
remaining in the Festival Bank Account.
Over the past week, Dentsu has intensified its efforts to undermine the Festival beyond
contract violations to tortious interference with W50's many contracts with performers and
producers. Dentsu has been contacting them, as well as insurers and others under contract,
falsely telling them they need not honor those agreements, and should not perform, and
promising to indemnify them for such contract violations. Dentsu, a multi-billion dollar media
behemoth, also used the media to disparage the Festival and W50.
An article dated May 2, 2019 provides as follows:
Michael Lang, lead organizer of Woodstock 50, is adamant the
anniversary festival will take place in August with the same lineup, same
partners and at the same venue. A source with Amplifi Live, the
investment arm of lead financier Dentsu Aegis Network which canceled
the festival on Monday, unequivocally disagrees. "He'd have to come
up with a different name. Different talent. Different everything," the
source told The Daily Beast. "The festival is now ours, and then we
decided to cancel it."
Dentsu source replied, "I can only assume it's government. It takes time
to wind things down." The State Department of Health reconfirmed to
The Daily Beast Wednesday a day after Dentsu's claim that the
speedway's permit is still pending and they are in contact to "determine"
next steps.
saying the artist contracts are with the financiers and not Woodstock 50.
Dentsu's onslaught against W50 and the Festival continues today.
This Court should grant a preliminary injunction under CPLR § 7502(c) in order to
preserve the status quo ante until the parties can submit their dispute to one or more arbitrators.
Per the terms of the Agreement, the parties must first submit their dispute to mediation, and if
that is unsuccessful, then to binding arbitration before the American Arbitration Association
("AAA"). Given the urgent nature of the planning for the Festival, the injunctive relief sought in
this application cannot await the initial resolution by mediation, followed by the presentation of
an application for relief to one or more AAA arbitrators to be selected. With only a few short
months remaining before the Festival, and with Dentsu's conduct growing more egregious each
day, W50 will lose its ability to produce the Festival as Dentsu effectively destroys the Festival's
goodwill and with it W50's irreplaceable opportunity to host the unique event.
As set forth below and in the Verified Petition, W50 has established all elements
necessary for a preliminary injunction, which should be granted to preserve these issues for
arbitration. In the interim, a temporary restraining order issue to preserve the status quo ante
pending a hearing on the preliminary injunction, lest Dentsu's plot succeed merely by the
passage of time, and through its continued contractual violations, interference and
disparagement.
The purpose of a preliminary injunction is to preserve the status quo pending an outcome
on the merits. See Cove v. Rosenblatt, 148 A.D.2d 411, 412 (2d Dep't 1989) (enjoining
employees from making charges to employer's account because maintaining status quo was
necessary "to preserve the efficacy of [a] potential arbitral award"). Where the status quo is in a
condition not of rest, but of action, and rest is exactly what will inflict the irreparable injury, a
court can issue a mandatory injunction before the case is heard on its merits. Graham v. Bd. of
Sup'rs, Erie Cnty., 49 Misc.2d 459 (Sup. Ct. Erie Cnty. 1966); Engelhardt v. Fessia, 31 Misc. 2d
127, 131 (Sup. Ct. N.Y. Cnty. 1961) (same).
With respect to a preliminary injunction in aid of arbitration, the key question is whether
the arbitration award would be rendered ineffectual without injunctive relief. N.Y. C.P.L.R.
§ 7502(c); Interoil LNG Holdings, Inc. v. Merrill Lynch PNG LNG Corp., 60 A.D.3d 403, 404
(1st Dep't 2009). That is plainly the case here. And, as with all injunctive relief, courts must
also consider: "(1) likelihood of petitioner's success on the merits; (2) danger of irreparable
harm to the petitioner if the preliminary relief is denied; and (3) a balance of the equities in the
petitioner's favor." Witham v. VFinance Invs., Inc., 17 Misc. 3d 1136(A), at *3 (Sup. Ct. N.Y.
Cnty. 2007), aff'd, 52 A.D.3d 403 (1st Dep't 2008). W50's application amply satisfies all of
these elements.
WITHOUT INJUNCTIVE RELIEF
Under § 7502(c), a preliminary injunction is proper where, as here, an arbitrator's
eventual award would be rendered ineffectual without injunctive relief. N.Y. C.P.L.R.
§ 7502(c); Interoil LNG Holdings, Inc., 60 A.D.3d at 404. Such injunctive relief is warranted
where some irreversible harm will have already occurred by the time the award is granted. See
Project Orange Assocs. v. GE Int'l, Inc., 23 Misc. 3d 764, 771-72 (Sup. Ct. N.Y. Cnty. 2009)
(granting injunction where arbitrator's potential award of specific performance would be
rendered ineffectual by petitioner's loss of its business).
In light of Dentsu's wanton and illegal conduct -- including its flagrant breaches of its
Agreement with W50, its theft of Festival funds, and its tortious interference with W50's
contracts with the performers and others -- and given the urgency of completing the preparations
and logistics to produce the Festival which will be held in three short months, the requested relief
is critically necessary pending the required initial AAA mediation and then arbitration of the
disputes between the parties. Without this relief, any award granted in the arbitration will be
ineffectual because by the time such relief is granted, Dentsu will have successfully sabotaged
W50's production of the Festival in plain violation of the Agreement and New York law. See
Interoil LNG Holdings, Inc., 60 A.D.3d at 404 (granting injunction pending arbitration where
loss of right to engage in particular business venture would result in damages that were difficult
to quantify); Project Orange Assocs., 23 Misc. 3d at 771-72.
W50 currently suffers, and will continue to suffer, irreparable harm unless an injunction
is immediately granted. W50 is ready, willing, and able to continue to produce the Festival and
make it a great success. The State of New York, Schuyler County, Town of Watkins Glen, and
the festival-going public desperately want the Festival to proceed. The performers are ready to
honor their contracts and make the Festival a great tribute to the Woodstock tradition and culture.
However, even though Dentsu is in clear violation of the Agreement, W50 cannot stop Dentsu's
onslaught in time to save the Festival unless this Court preserves the status quo ante while W50
seeks to enforce its rights before the AAA, as required by the Agreement. Absent this relief,
Dentsu's illegal and outrageous attack on the Festival and on W50 will have succeeded because
W50 will be unable to produce the Festival, secure the permits, retain the talent, and attract the
ticket purchasers. The Festival's and W50's opportunities and identifiable funds will have been
lost, and their reputations irreparably harmed, as set forth below.
A. W50 Will Suffer Irreparable Harm to its Goodwill and Reputation
Damage to a business's reputation and goodwill is an irreparable injury that is difficult if
not impossible to quantify and cannot be redressed through monetary damages alone. See, e.g.,
Second on Second Café v. Hing Sing Trading, 66 A.D.3d 255, 273 (1st Dep't 2009) (loss of
goodwill of an ongoing business "constitute[s] irreparable harm warranting the grant of
preliminary injunctive relief"); Four Times Square Assocs. v. Cigna Invs., Inc., 306 A.D.2d 4, 6
(1st Dep't 2003) ("the threat to [plaintiff's] good will and creditworthiness is sufficient to
establish irreparable injury warranting the granting of injunctive relief"); Destiny USA Holdings,
LLC v. Citigroup Global Mkts. Realty Corp., 69 A.D.3d 212, 220-23 (4th Dep't 2009) ("[h]arm
to business reputation is harm for which money damages are insufficient and for which
injunctive relief may be appropriate"); CanWest Global Commc'n Corp. v. Mirkaei Tikshoret
Ltd., 9 Misc.3d 845, 872 (Sup. Ct. N.Y. Cnty. 2005) (company established irreparable harm
through "loss of customers, revenue and an erosion of its reputation" and loss of the right to
participate in the management of its venture).
Dentsu has leveraged its connections in the media and access to Festival stakeholders to
attempt to destroy the Festival, and with it, W50's goodwill and business reputation. Unless
restrained, Dentsu will continue to breach its contractual duties by issuing disparaging statements
purporting to cancel the Festival based on pretextual reasons. Dentsu's interference with W50's
business relationships has caused and will continue to cause irreparable harm to W50's goodwill
and business reputation, calling into question not only the viability of the Festival this August,
but all future Woodstock events.
A petitioner establishes irreparable harm where it has no "adequate remedy at law" if
injunctive relief is not granted. See Lesron Junior, Inc. v. Feinberg, 13 A.D. 2d 90, 93-94 (1st
Dep't 1961); Voyiatgis v. Lelekakis, 59 Misc. 3d 1225(A), *3 (N.Y. Sup. Ct. Queens Cty. 2018)
(finding irreparable harm because plaintiff's interest was "unique and money damages may not
be an adequate remedy"). For a remedy at law to be adequate, the legal relief must be "as
practicable and efficient as an equitable remedy." Bd. of Higher Educ. of the City of N. Y. v.
Marcus, 63 Misc.2d 268, 272 (Sup. Ct. Kings Cnty. 1970). Accordingly, money damages are
inadequate where plaintiff's loss is unique and its damages cannot be easily measured. Id.
The loss of a unique business opportunity is per se irreparable harm because the damages
flowing from same are unascertainable and inadequate to redress the plaintiff's harm. See
Destiny USA Holdings, 69 A.D.3d at 220-23 (granting mandatory preliminary injunction
requiring defendant to continue funding construction project where the project's "unique
character renders it difficult to calculate any damages sustained by [plaintiff]"); Tom Doherty
Assocs. v. Saban Entm't, Inc., 60 F.3d 27, 38 (2d Cir. 1995) (interpreting New York law)
(granting preliminary injunction where the subject of the injunction was "a wholly unique
opportunity, and the amount of damages . . . will be largely indeterminate if the opportunity is
denied."); Space Imaging Europe Ltd. v. Space Imaging L.P., No. 98 CIV. 2291 (DC), 1998 WL
190356, at *2 (S.D.N.Y. Apr. 21, 1998) (finding that uniqueness of the project meant plaintiffs
"miss[ed] out on a valuable business opportunity that monetary compensation is not likely to
redress").
Here, there can be no doubt that this Festival honoring the 50th Anniversary of
Woodstock comes only once, cannot be replicated, and is unique. The loss of W50's one-time
opportunity to stage the Festival cannot be completely compensated through monetary damages.
Absent the grant of injunctive relief, including the restoration of the Festival's funding for
production costs, W50 will lose the only opportunity to stage this unique event. The Festival's
cancellation would also deprive the local community of the multi-million dollar shot in the arm
from the monies to be spent by the tens of thousands who will attend the Festival.
C. W50 Will Suffer Irreparable Harm Based on Loss of Festival Account Funds
Injunctive relief is also proper to recover identifiable converted funds. See, e.g., Amity
Loans, Inc. v. Sterling Nat. Bank & Tr. Co. of N.Y., 177 A.D.2d 277, 279 (1st Dep't 1991)
(granting injunction requiring borrower to hold certain funds in trust for lender where the money
at issue constituted "identifiable proceeds" that borrower was obligated to turn over). Here, the
money Dentsu took from the Festival Bank Account is a specific fund that was earmarked for a
specific purpose. It is thus the proper subject of an injunction. See id.
If W50 is unable to access the funds that belong in the Festival Bank Account, W50 will
be unable to produce the Festival, secure the permits, retain the talent, and attract the ticket
purchasers. Indeed, in the next four to six weeks alone, W50 urgently needs some $6 million to
$9 million to fund fees and expenses for production, promotion, advertising, permits,
engineering, marketing, and traffic management, among other things. These are fees and
expenses Dentsu and W50 agreed in the Agreement were valid and necessary Festival expenses.
Accordingly, W50 has more than established that it will suffer irreparable harm absent
injunctive relief by reason of its loss of a unique business opportunity, by reason of its loss of
funds expressly and contractually earmarked to produce the Festival, and by reason of the
reputational damage and loss of goodwill which cannot adequately be compensated through
money damages.
III. W50 IS LIKELY TO SUCCEED ON THE MERITS
To merit the issuance of a preliminary injunction, "[i]t is enough if the moving party
makes a prima facie showing of his right to relief; the actual proving of his case should be left to
the full hearing on the merits." Tucker v. Toia, 54 A.D.2d 322, 326 (4th Dep't 1976); see also
Terrell v. Terrell, 279 A.D.2d 301, 303 (1st Dep't 2001) ("[A] prima facie showing of a right to
relief is sufficient; actual proof of the case should be left to further court proceedings.") (citation
omitted). This standard can be met even where there are disputed issues of fact. Swope v.
Melian, 35 A.D.2d 981,981 (2d Dep't 1970) (preliminary injunction was proper where, "[i]n
view of the conflicting affidavits and the incomplete state of the record, plaintiffs at the very
least raised triable issues which could only be resolved in the main action.")
In arbitration, W50 will assert claims, at minimum, for: (i) breach of contract; (ii) tortious
interference with contract; (iii) commercial defamation; and (iv) business disparagement.
Although it is not necessary for W50 to demonstrate that it is likely to succeed on all such
claims, W50 has made at least a prima facie showing on each claim, as demonstrated below and
in its accompanying Verified Petition.
A. Dentsu Repeatedly Breached the Agreement
To state a claim for breach of contract, a plaintiff must allege: (1) the parties entered into
a valid agreement, (2) plaintiff performed, (3) defendant failed to perform, and (4) damages.
VisionChina Media Inc. v. S'holder Representative Servs., LLC, 109 A.D.3d 49, 58 (1st Dep't
2013); Five Star Dev. Resort Comty., LLC v. iStar RC Paradise Valley LLC, No. 09 CIV. 2085
(LTS), 2010 WL 1005169, at *4 (S.D.N.Y. Mar. 18, 2010). Here, there is no dispute as to the
existence of a valid agreement, nor is it disputed that W50 has alleged damages. W50 has also
alleged in the Verified Petition that W50 has performed the Agreement and was not in material
breach thereof when Dentsu breached it in multiple ways. W50 has also pled in the Verified
Petition that Dentsu breached the agreement in at least four ways, any of which, standing alone,
would be sufficient to establish a likelihood of success on the merits. Here, W50 has shown it
is likely to succeed as to each of Dentsu's contractual breaches.
First, Dentsu failed to cooperate with W50 as contemplated by the Agreement. Dentsu
was obligated under the Agreement to cooperate with W50 (Agreement, ¶ 2(a)), to allow W50 to
make financial decisions (id., ¶ 3(c)), to attend budget meetings (id., ¶ 3(d)), and to provide
monthly balance sheets and access to financial records (id., ¶¶ 6(e), 7(c)). Instead, Dentsu
intentionally violated its contractual obligations, laying in the road of progress and causing the
purported lag in production that Dentsu ultimately blames for its bald attempt to destroy the
Festival. (Verified Petition, ¶ 39).
Dentsu also breached the Agreement by purporting to exercise the Control Option, when
it had no right to do so. Dentsu claimed that it could have terminated the Agreement and could
thus invoke the Control Option as an alternative. But Dentsu had neither the right to terminate
nor the right to invoke the Control Option, because there was no precipitating breach by W50
that in any way supported Dentsu's actions. (Id., ¶¶ 33-34; 40-42.) W50 was not in material
breach, and thus Dentsu's notice to cure alleged breaches was of no force or effect. (Agreement,
¶¶ 12(a)(ii), (iv)); (Verified Petition, ¶¶ 33-34; 40-42).
Second, Dentsu had no right to terminate because it was itself in material breach and had
committed fraud, either of which precluded Dentsu from terminating the Agreement.1
(Agreement, ¶¶ 12(a)(i), (iii); 12(b)) (Verified Petition, ¶¶ 39, 41, 42). Because Dentsu could not
validly terminate, the Agreement's terms did not allow Dentsu to exercise the Control Option.
(Agreement, ¶ 12(d)); (Verified Petition, ¶ 42).
Dentsu further breached the Agreement by cancelling the Festival without the joint
agreement of the parties. The Agreement expressly and unambiguously provides that "[a]ny
decision to cancel the Festival shall be jointly made in writing by the Parties." (Agreement,
¶ 12(e).) No such decision was made, no such agreement was reached, and there is no writing
reflecting any such agreement or decision. (Verified Petition, ¶ 43).
Furthermore, even if the Control Option had been validly exercised -- and it was not --
Dentsu was obligated to produce the festival, not cancel it once it exercised that option. (Id.,
¶ 44). The Control Option specifically states: "If Amplifi chooses to exercise its Control Option,
W50 shall . . . take such other actions or omit to take such actions as Amplifi shall reasonably
direct that are required to successfully produce the Festival." (Agreement, ¶ 12(d) (emphasis
added)). The exercise of the Control Option in no way supplants the requirement that any
cancellation of the Festival be made by joint written agreement, and the language of the
Agreement is unambiguous that Dentsu had no right to unilaterally cancel the event, even if it
had otherwise validly exercised the Control Option (which it had not). (Verified Petition,
¶¶ 43-44.). In other words, the parties expressly bargained with one another that the show was to
go on. Dentsu could not cancel it alone, and even if Dentsu could take the wheel and push W50
aside (which it could not validly do), Dentsu was contractually bound to complete Festival
preparations and make it a success. Dentsu has done just the opposite in abject violation of the
letter and spirit of the Agreement.
Finally, Dentsu flagrantly breached the Agreement by misappropriating $17.8 million in
the Festival Bank Account. Those funds were expressly required to be spent only on Festival
expenses, and Dentsu could not take those funds without joint agreement by the parties, and of
course, there was no such joint agreement. (Id., ¶¶ 27, 46.) The Agreement specifically states:
"[A]ny funds shall only be withdrawn or disbursed from the Festival Bank Account to pay for
costs and expenses of the Festival[.]" (Agreement, ¶ 6(a).) Dentsu knowingly violated this
provision in bad faith, fully intending that the Festival production would be starved of the monies
necessary to continue the production.
To state a claim for tortious interference with contractual relations, a plaintiff must plead:
"(1) the existence of a contract between plaintiff and a third party; (2) defendant's knowledge of
the contract; (3) defendant's intentional inducement of the third party to breach or otherwise
render performance impossible; and (4) damages to plaintiff." Kronos, Inc. v. AVX Corp., 81
N.Y.2d 90, 94 (1993). Where such claim is based on false and disparaging statements made to
other parties, a plaintiff may state its claim by identifying "those of its customers who were
purportedly contacted by the defendants, describing the challenged conduct and the existing and
prospective customer agreements affected by that conduct." Kevin Spence & Sons, Inc. v. Boar's
Head Provisions Co., 5 A.D.3d 352, 354 (2d Dep't 2004).
Here, W50 contracted directly with approximately 75 performers who have already been
paid to perform at the Festival. It is undisputed that Dentsu was aware of these contracts. As
pled in the Verified Petition, Dentsu has not only disseminated false information to the media
about the Festival, but also has intentionally interfered with these contracts. (Verified Petition,
¶¶ 35-37, 48, 5043-44.) Dentsu contacted the agents of many of these performers to encourage
them to terminate their agreements with W50 and not to perform. (Id., ¶¶ 47, 37, 48.)
Furthermore, Dentsu promised to indemnify the performers and has even implied to certain
performers that if they play ball with Dentsu and follow its demand to breach their agreement
with W50, that Dentsu may find a place for those performers to perform at the 2020 Summer
Olympics in Tokyo, for which Dentsu is a major sponsor. (Id., ¶ 48.) This has clearly resulted
in damages to W50 in the form of reputational harm and potential lost contracts with its
performers. W50 thus has clearly pled a claim for tortious interference with contracts with
performers and others.
C. Dentsu Engaged in Commercial Defamation and Disparagement
To plead a claim for defamation, a plaintiff must allege: (1) a defamatory statement of
fact; (2) about the plaintiff; (3) publication to a third party; and (4) injury. Van-Go Transp. Co.
v. N. Y. City Bd. of Educ., 971 F. Supp. 90 (E.D.N.Y. 1997). A claim of business defamation
must allege that the statement called into question the company's reputation for honest and
competent dealing among its customers or peers. Yesner v. Spinner, 765 F. Supp. 48, 51
(E.D.N.Y. 1991); Van-Go, 971 F. Supp. at 98 ("Reputational injury to . . . a company, consists of
a statement that either imputes some form of fraud or misconduct or a general unfitness,
incapacity, or inability to perform one's duties."). An injury to a party's business reputation is
considered defamation "per se," and therefore actionable without any proof of special damages.
See Drug Research Corp. v. Curtis Publ'g Co., 7 N.Y.2d 435, 440 (1960) (impeaching the
business methods of a corporation "constitutes libel per se," permitting corporations to plead
only general damages).
The related tort of business disparagement, often called "injurious falsehood," requires
allegation that (1) defendants knowingly published false and derogatory matter regarding
plaintiffs' business, (2) that were of a kind calculated to prevent others from dealing with the
plaintiff, (3) to plaintiff's demonstrable detriment. Banco Popular N. Am. v. Lieberman, 75
A.D.3d 460, 462 (1st Dep't 2010).
Here, Dentsu's statements about the Festival have both derided the Festival itself as well
as W50's overall competence and ability to run its business. (Verified Petition, ¶¶ 6-8, 35-38,
50.) Therefore, the facts support a claim for both defamation and business disparagement.
Dentsu's press release and statements to the media and others were invalid, unauthorized,
violative of the parties' Agreement, and false. (Id., ¶ 6-8, 35, 50.) Dentsu has falsely stated that
W50 was not competent to produce the Festival, and falsely stated that W50's plan for the
Festival threatened the safety of concertgoers, an outright, scurrilous lie. (Id., ¶ 30.) These false
statements had the very detrimental effect which Dentsu intended, damaging W50's business
reputation and goodwill, impugning W50's business acumen, and throwing the production of the
Festival into doubt, causing concern around the world and of course for every fan, the Town of
Watkins Glen, Schuyler County, the State of New York, and every performer, producer and party
under contract. (Id., ¶¶ 35-37.)
Injunctive relief is appropriate where, as here, defamatory statements with respect to a
person's business are made as part of a course of conduct deliberately intended to further a
fraudulent, malicious, or unlawful purpose. See, e.g., W. Willow Realty Corp. v. Taylor, 23
Misc. 2d 867, 869 (Sup. Ct. Rockland Cnty. 1960) (enjoining defamatory publications is
appropriate where "essential to the preservation of a business or of other property interests
threatened with impairment by illegal … or … tortious acts" for which the defamatory statement
is "merely an instrument"). Similarly, relief enjoining the false disparagement of plaintiff's
business has been granted where such relief would protect the plaintiff's goodwill. H.E. Allen
Mfg. Co. v. Smith, 224 A.D. 187, 192 (4th Dep't 1928) ("[E]njoining false and fraudulent
disparagement protects the intangible, but real, relationship existing between a merchant and his
usual customers—his 'good will.'").
Accordingly, W50 has more than amply pled a prima facie claim of defamation and
commercial disparagement.
IV. THE BALANCE OF EQUITIES FAVORS GRANTING
INJUNCTIVE RELIEF TO W50
To find that equities are balanced in favor of an injunction, "'[I]t must be shown that the
irreparable injury to be sustained . . . is more burdensome [to the plaintiff] than the harm caused
to defendant through imposition of the injunction." McLaughlin, Piven, Vogel, Inc. v. W.J.
Nolan & Co., 114 A.D.2d 165, 174 (2d Dep't 1986); see Credit Index, L.L.C. v. Riskwise Int'l
L.L.C., 282 A.D.2d 246 (1st Dep't 2001); Klein, Wagner & Morris v. Lawrence A. Klein, P.C.,
186 A.D.2d 631, 633 (2d Dep't 1992). "'In ruling on a motion for a preliminary injunction, the
courts must weigh the interests of the general public as well as the interests of the parties to the
litigation.'" DePina v. Educ. Testing Serv., 31 A.D.2d 744, 745 (2d Dep't 1969); see Seitzman v.
Hudson River Assocs., 126 A.D.2d 211, 214 (1st Dep't 1987).
W50's request for injunctive relief seeks to preserve the status quo ante pending dispute
resolution processes to address Dentsu's misconduct. W50 is not seeking any affirmative action
from Dentsu apart from what is required by law and the Agreement. There is no doubt that the
Agreement contemplates that the Festival will proceed and the law prohibits unlawful
interference with W50's rights. W50's opportunity to stage the Festival is a once-in-a-lifetime
opportunity that cannot be replaced by money.
Dentsu will not suffer any comparable hardship if the Court grants W50's request for
injunctive relief. Complying with contractual obligations to avoid interference with W50's right
to stage the Festival, and with W50's relationships with talent agencies, performers, and the
public, will not harm Dentsu. Dentsu's having to put back in the Festival Bank Account the
$17.8 million it wrongfully absconded with can hardly be called a hardship for Dentsu. Dentsu
had already put that money in the Festival account, had committed that it be spent for the
Festival, and had acknowledged in the Agreement that it could well lose every cent of that
money, a risk it freely assumed in the Agreement. (Agreement, ¶ 13(c).)
To the extent Dentsu claims it would suffer harm by returning the funds it
misappropriated, that is not grounds for denying W50 its requested relief because any harm to
Dentsu would be a result of its unilateral and improper violations of its own contractual
obligations. See DAR Assoc., Inc. v. Uniforce Servs., Inc., 37 F. Supp.2d 192, 200 (E.D.N.Y.
1999) (finding that hardship from enforcing contract is undermined by the party's informed
acceptance of such an outcome when they executed the contract). This is a problem of Dentsu's
own making. And insurance coverage will cover any third party claims against Dentsu that may
arise.
Thus, the balance of the equities tips heavily in W50's favor.
For all the foregoing reasons and those set forth in the accompanying Verified Petition,
Petitioner W50 respectfully submits that it has satisfied each and every element for preliminary
injunctive relief in aid of arbitration, and respectfully requests that this Court grant the
preliminary injunction as sought in the Order to Show Cause and in the interim, grant W50's
requested temporary restraining order to preserve the status quo ante.
The undersigned hereby certifies that the foregoing MEMORANDUM OF LAW IN
SUPPORT OF APPLICATION FOR CPLR § 7502(c) INJUNCTION IN AID OF
ARBITRATION contains 6888 words according to the word count of the word-processing
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