Amendment to Registration of Securities of a Small-Business Issuer — Form 10-SB Filing Table of Contents
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This
Digital Music and Video License Agreement (the "Agreement"),
together with the Standard Terms and Conditions attached
hereto and
incorporated by reference, is entered into as of the date of signature of this
Agreement (the "Effective Date") by and between Mohen, Inc.
d/b/a SpiralFrog, a Delaware corporation with its principal place of business
at
95 Morton Street, New York, New York10014, including, but not limited to,
such
licensing party's Affiliates, as defined herein, (collectively referred to
in
this Agreement as "Licensee") and the licensing party listed on
the attached signature page, (referred to in this Agreement as either
"Licensor"or "you"). Unless otherwise indicated, all
capitalized terms used in this Agreement have the meaning set forth in the
Standard Terms and Conditions.
RECITALS
WHEREAS,
Licensee desires to offer advertising-supported digital music and digital music
video content to Users via the Service in the formats including, but not limited
to (i) Limited Music Downloads, (ii) Limited Video Downloads, (iii) Music
Streams and (iv) Video Streams;
WHEREAS,
Licensor owns and controls certain rights in and to digital music and digital
music video subject to this Agreement;
WHEREAS,
Licensor has full power and authority to grant to Licensee the right;. privilege
and
license to use the Licensed Content in connection with the Service;
NOW,
THEREFORE, in consideration of the mutual covenants herein contained, the
parties hereto agree as follows:
I. Grant
of Rights.
(a) Licensor
hereby grants the following non-exClusive rights in and to the Licensed
Content of Licensor and its Represented Labels (listed in Exhibit "B",, as amended
from
time to time, and incorporated by reference) to Licensee, during the Term and
within the Territory:
(i) the
right
to make and distribute copies of, to publicly perform and otherwise exploit
the
Licensed Content solely in connection with the Service;
(ii) the
right
to reproduce the Licensed Content in connection with DRM encoding;
(iii) the
right
to publicly display the Licensed Content in connection with promotion of the
Service;
(iv) the
right
to collect any and all income derived from the use of the Licensed Content
in
connection with the Service;
1
(v) the
right to store, host and prepare backup copies of the Licensed
Content solely for the purposes of exercising the specific rights granted
hereunder.
(b) Once
Licensee sources any Licensed Content, from Licensor, it shall not intentionally
source that same Licensed Content from any third party during the
Term.
(c) At
all
times during the Term that Licensor provides Licensed Content with complete
publishing information and to the extent that Licensee has secured such
publishing rights, Licensee shall make all of the Licensed Content available
on
the Service.
(d) Licensor
has
no objection to Licensee's use of reputable third-party meta-data
(i.e., data from All Music Guide, Gracenote, Muze and Pollster) in conjunction
with the Licensed Content, but makes no grant or warranty in such
regard.
1A.Delivery
of
Content,
Promptly
after execution hereof, but in no event more than sixty (60) days after
execution (unless Licensee extends such deadline in Litentee's sole discretion),
to the extent the Licensed Content is then available Licensor shall furnish
the
Licensed Content to Licensee in the form of WMA files (encoded at
192Kbps). for audio and a format to be determined by mutual agreement
between the patties for video on hard drives, and Licensee shall pay to Licensor
its- charges for same per the rate card annexed as Exhibit D; provided however,
such delivery charges and the advance payment set forth under subparagraph
3(g)(1) below will be due and payable only if the delivery of content Is fully
inclusive of all Currently Available (1) sound recordings, (ii) music videos,
and (iii) non-music videos in Licensors catalog AND where the quantity of
1A (I) meets or exceeds 450,000 sound recordings ("Full Delivery").
AS. well, Licensee will be responsible for encoding the Licensed
Content and for creating and operating the Seryice. Further, Licensor
will proVide Licensed COntent as Licensed Content becomes newly available
according to the provisions of Section 4.of the Standard Terms and Conditions,
and Licensor will use commercially reasonable efforts to perMits Licensee to
receive and integrate such Licensed Content Into the ServiCe for distribution
to
Users by the public release date of the Master ReCording.
2. Restrictions
on Grant of Rights.
(a) Any
and all rights in and
to the Licensed Content not expressly granted hereunder
are reserved by Licensor, including, but not limited to:
(i) rights
to
karaoke or SynchrOnization with video games;
(ii) merchandising. rights;
(iii)
rights to derivative works;
2
(iv) rights
to
use, exploit, or permit the use of exploitation of the Licensed Content as
a
ringtone, ringback tone, or other so-called telecommunication
personalization products;
(v) any
use
of the Licensed Content for a television or radio marketing
campaign, product tie-in, game or contest;
(vi) rights
to distribute
physical copies of Licensed Content (e.g. CDs
or
DVDs), apart from any physical copies of Licensed Content which are sold
separately on the Service by third parties (i.e., those third parties who
represent that Licensor has authorized in writing the exercise of such
rights).
(b) Licensor
hereby acknowledges that User's experience of Licensed Content occurs in
connection with third-party advertising; however, Licensee shall
not:
(i) create
a direct
association between any specific Licensed Content
and any third-party advertising in a manner that suggests Licensor or artists
featured in any specific Licensed Content is associated with or endorses any
advertiser, product or service;
(ii) knowingly
display advertisements
from any entity whose primary
business relates to the unauthorized distribution of copyrighted material,
illegal drugs or pornographically obscene materials;
(c) For
the.
avoidance of doubt, ownership and control of any copyrights and/or tradeMarks
In
the LicenSed COntent is•retained solely by Licensor, and neither Licensee. nor
any User or other third party shall obtain any ownership rights in any work
derived from or that makes use of the Licensed Content.
(d) Licensee
agrees to use commercially reasonable efforts to monitor new
recordings ingested into its catalog to reasonably determine whether a third
party (a 'Duplicate Licensor") purports to license any Licensed Content to
Licensee (a "Duplicate License"). If Licensee or Licensor discovers a Duplicate
License, Licensee will (i) promptly notify the DupliCate Licensor that the
Licensed Content concerned has already been licented froM Licensor and that
Licensee intends to account to Licensor, and not the Duplicate Licensor, with
respect to the Licensed Content concerned unless the Duplicate Licensor can
provide evidence refuting Licensor's exclusive right to license the Licensed
COntent to Licensee, and (ii) subject to any confidentiality requirements
Licensee may be subject to in a third-party agreement, notify LicensOr of the
name and contact information of the Duplicate Licensor so that LicenSor may
take
action as it deeMs appropriate. Licensee will make commercially reasonable
efforts to cooperate with Licensor to resolve matters relating to such Duplicate
Licensors..
3
3. Compensation,
In
consideration of the rights granted herein, Licensee shall pay Licensor the
following amounts), which will be calculated on a quarterly basis:
(a)Music
Royalty. With respect solely to Licensee's exploitation of Limited Music
Downloads and Music Streams, Licensee shall pay to Licensor a royalty equal
to
fifty percent (50%) of Gross Music Revenue multiplied by Licensor's Music
Royalty Share.
(i) The
"Music
Royalty Share"shall equal a fraction, the numerator
of which shall be the sum of the number of Music Plays and Music Streams, and
the denominator of which shall be the sum of the number of Music Plays, Music
Streams, Service-wide Music Plays and Service-wide Music Streams.
(b) Video
Royalty. With respect solely to Licensee's exploitation of Limited
Video Downloads and Video Streams, Licensee shall pay to Licensor a royalty
equal to fifty percent (50%) of Gross Video Revenue multiplied by Licensor's
Video. Royalty Share), which will be calculated on a quarterly
basis.
(i) The
"Video
Royalty
Share" shall equal a fraction, the numerator
of which shall be the sum of the number of Video Plays and Video Streams, and
the denominator of which shall be the sum of the number of Video Plays, Video
Streams, Service-wide Video Plays and Service-wide Video Streams,
(c) Unsold
Advertising Inventory. LicenSee shall provide to Licensor, and
Licensor shall be entitled to use, a pro-rata share of twenty-five percent
(25%)
of Licensee's unsold advertising inventory, Which Licensor may use to promote
Licensed Content owned and/or controlled by Licensor. LicenSor'S pro-rata share
of unsold advertising inventory shall be determined by using the fractitin
used
in calculating Licensor's Music Royalty Share multiplied by twenty-five percent
(25%) of the unsold advertising inventory available based upon the
previbus quarter's royalty calculation (or In the case of the Service's
first quarter after laUnch, a commercially reasonable estimate of the
same).
(d)Publishing
Fees Not Included. The rights granted by Licensor to Licensee under this
Agreement do not include any rights to perform, reproduce or otherwise use
the
musical compositions embodied
In the Licensed Content. Licensee is solely responsible for obtaining
any
rights In and to such musical compositions that may be
required
in connection with the operation of the Service, and for paying any and
all related royalties and fees. Licensor will supply Licensee
with all information in Licensor's possession that is necessary for LicenSee
to
obtain such rights:
(e) Licensee
will use its best
efforts to track Music Plays; Service-wide Music
Plays, Video Streams and Service-wide Video StreaMs using the system of each
Covered Device, which systems are subject to interruptions and other
interference not within Licensee's control, and that such interrUptions and
other interference Will affect the royalty calculations set forth
above.
(f)Favored
Nation. No other
licensor of master recordings shall receive a greater royalty rate or more
favorable royalty calculation than that provided to Licensor in paragraph 3
above. Licensee shall notify Licensor promptly if it does so and shallimplement
such higher royalty provisions retroactively to when such royalties were paide
to such other party.
(g)Advances. Licensee
shall pay to Licensor the following non-returnable
advances which shall be recoupable from all royalties payable to licensee under
this paragraph 3:
(i) USD
$50,000, payable upon Full Delivery.
(ii) If
as of
the end of any quarterannual accounting period hereunder the foregoing advance
Is recouped, Licensee shall pay to Licensor another $50,000 advance, subject
to
the same terms and conditions. Such "rolling" advances shall continue throughout
the Term.
(h)Change
in Business Model.
In the event that Licensee begins charging users
fees
to use the Service, e.g., if the Service is converted to a subscription-based
model, the parties agree to engage in good faith negotiations to determine
fair
and reasonable business terms to amend the license and compensation terms of
this Agreement.
4.Term.
The
term
of this Agreement shall commence as of the Effective Date, and unless
earlier terminated in accordance with the Terms and Conditions,
shall
continue until the later of (a) December 31, 2008, or (b) the end of the
quarterannual period hereunder during which all advances are recouped, except
that such extension of the Term for non-recouprrient shall in no event extend
beyond eighteen (18) months. No later than thirty (30) days after December31,2008, or thirty (30) days after the end of any subsequent quarterannual period,
Licensee shall have the right, in its discretion, to pay back to Licensor the
amount of any unrecouped advance balance and, if It does so, the Term shall
end
on that 30th day.
5.Territory
The
territory of rights granted herein shall be the universe, with the exception
of
any territories set forth on the 'Excluded Territories List', set forth on
Exhibit "C" hereto and incorporated by reference, which are noted in the
metadata accompanying the Licensed Content or of which Licensor otherwise
notifies Licensee in writing according to the terms of Sections 4 and 13 of
the
Standard Terms and Conditions.
IN
WITNESS WHEREOF, the parties have executed this Agreement as of the
Effective Date:
Mohen
Inc. d/b/a
Spiralfrog
Date
By:
/s/
Name
Title
The
Orchard Enterprises,
Inc.
Date
By:
/s/
Geg
Scholl
CEO
Licensor
address: 100 Park Avenue, 2nd Floor, New York, NY10017
DIGITAL
MUSIC AND VIDEO LICENSE AGREEMENT/SOUND RECORDINGS
STANDARD
TERMS AND CONDITIONS
1.Definitions.
"Affiliate"means, with respect to any Person: (i) any other Person of which
securities or other ownership interests representing fifty percent (SO%) or
more
of the voting interests are, at the time such determination Is being made,
Beneficially OWned or Controlled by such Person; and (ii) any other Person
which, at the time such determinatibn is being made, is Controlling, Controlled
by, or under common Control with, such Person.
"A/V
Master Recording"shall mean a music video licensed hereunder that
embodies a Master Recording.
"Beneficial
Ownership"means ownership of any security or interest by any Person
who, directly or indirectly, through any contract, arrangement, understanding,
relationship or otherwise, has or shares (i) voting power, which includes the
power to vote, or direct the voting of, such security or interest, or (ii)
investment power, which includes the power to dispose, or to direct the
disposition, of such security or interest.
"Confidential
Information"shall mean (a) information relating to the business
affairs, employees, providersi financial
condition, marketing or development plans, strategies, inventions, discoveries,
ideas, concepts, processes, techniques, methodolOgies, know-how; Trade Secrets,
forecasts and forecast assumptions and volumes, performance, pricing or
operations of the disclosing Party that the disclosing Party treats as
confidential or prOprietary, (b) the Parties' conduct, decisions, documents,
and
negotiations as part of, and. the status of, any dispute resolution proceedings,
(c) any other Information, whether in a tangible medium or oral, and whether
proprietary to the disclosing Party or not, that is reasonably understood to
beconfidential or proprietary.
"Control"means Beneficial Ownership, direttly or indirectly, by a Person of
more
than fifty percent (50%) of the voting power of another Person, or by a Person
who acquires the ability to control the tondUct of the business of the other
Person.
"Covered
Device"shall mean each of (a) a Personal Computer
that supports DRM and is able to receive Licensed Content via a communications
network (b) a Portable Digital Music Device that supports DRM and is able to
receive Licensed Content via a communications network.
"Currently
Available"shall mean all Licensor Content which: (a) is available for
commercial distribution as of the date hereof, and (b) Licensor has made
available to other digital retailers as of the date hereof.
"DIM"
shall mean digital rights management technology that Imposes controls over
the
use of Licensed Content consistent with accepted industry practices, including
the Security Systems set forth in this Agreement.
"Gross
Advertising Revenue"shall mean all non-returnable monies
actually received by Licensee during the Term in consideration of the placement
and/or distributitin of advertisements, promotions, and/or sponsorships in
connection with the Service and/or exploitation via the Service of Licensed
Content. Notwithstanding the foregoing, Grost Advertising. Revenue
shall
expressly exclude. Gross eCommerce Revenue.
"Grass
eCommerce Revenue"shall mean all non-returnable monies actually
received by Licensee (or any entity acting on its behalf after such entity
has
deducted any commissions and/or service fees) during the Term, from any other
entity (including, without limitation, advertisers), who sells goods or services
on the Service or via a separate webSite that is accessed via a direct link
or
advertisement on the Service and fcir which sales both (a) Licensee receives
fees, bounties and/or other consideration as a result of referrals of Users
to a
third party that result in the sale of or license of content, product's or
services from such third party, AND (b) Licensor is compensated via separate
financial arrangements between Licensor and such users and/or entities and/or
third parties distributing content to such users and entitles, sometimes
referred to herein as "Third-Party Financial Arrangements." As part of
LicenSee's accounting Statement, as defined herein, LiCensee will provide notice
to Licensor which Third-Party Financial Arrangements may be included in this
calculation.
"Gross
Music Revenue"shall mean Gross Advertising Revenue which is
directly attributable to Limited Music Downloads and Music Streams.
"Gross
Video Revenue"shall mean Gross Advertising Revenue which is
directly attributable to Limited Video. Downloads and Video
Streams.
"Licensed
Content"shall mean each and all Master Recordings, A/V Master
Recordings and/or Related Content subject to the terms AgteeMent and listed
in
Exhibit "B"
herein
Which are owned, controlled by, or licensed to Licensor, in whole
or in part, and which are available for the purposes described therein, subject
to any restrictions or limitations as set forth In Exhibit "C".
"Limited
Music Download"shall mean a digital transmission of a
time-limited or other use-limited download of a Master Recording, which is
deliVered via the Service from a Secured Server(s) to the Covered. Device of
a
User in accordance with the terms and conditions of such User's agreement with
Licensee and is only available to such User through such Covered Device for
a
limited period of time. Each Limited Music Download times out within the earlier
of (a) six (6) months from the date on which the User first downloaded the
Master Recording, or (b) three (3) months from the date on which the User last
reconnected his/her CoVered DeVice so that the service can renew the license
and
collect play-count information.
"Limited
Video Download"shall mean an encrypted digital transmission of
a time-limited or other use-limited download of an A/V Master Recording, which
is delivered via the Service from a Secured Server(s) to the Covered Device
of a
User in accordance with the terms and conditions of such User's agreement with
Licensee and is only available to such User through such Covered Device for
a
limited period of
time.
Each Limited Video Download times out within the earlier of (a) six (6) months
from the date on which the User first downloaded the A/V Master Recording,
or
(b) three (3) months from the date on which the User last reconnected his/her
Covered Device so that the service can renew the license and collect play-count
information.
"Master
Recording"shall mean an audio-only master sound
recording.
"Music
Play"shall mean each instance whereby a User causes a Licensor-owned
Master Recording to be heard in its entirety on a Covered Device, when such
content was originally delivered to the Covered Device as a Limited Music
Download.
"Music
Stream"shall mean an encrypted digital transmission from Secured
Servers via the Service that allows a User to receive and listen to a particular
Licensor-owned Master Recording upon request at a time chosen by the User using
streaming technology (including, without limitation, via Real Networks'
RealAudio or Microsoft's Windows Media Audio formats) through the User's Covered
Device, which transmission will (a) not result in a substantially complete
portable reproduction of such Master Recording (other than a temporary copy
such
as those used solely for caching or buffering) and (b) occur substantially
contemporaneously with the play of the given Master Recording.
"Person"means a natural person, a corporation, a limited liability company,
a
partnership, a trust, a joint venture, a division, any governmental authority
or
any other entity or organization.
"Personal
Computer"shall
mean an Internet Prototol (IP)-enabled 'desktop or notebook
computer.
"Portable
Digital Music Device"shall mean a portable digital music device
(including, but not limited to, mobile-telephone and other mobile devices that
may also operate on a wireless communications network) that is used for the
storage and play/playback of digital music files (i.e., music files encoded
in
MP3, AAC, WMA or similar audio format).
"Related
Content"shall mean Licensor-provided identifying material with respect
to the Master Recordings and A/V
Master Recordings licensed hereunder, including, but not limited
to,
trademarks, album artwork, artists' names, biographies, likenesses, metadata
and
ISRC codes.
"Represented
Labels"shall mean any Person (including individual artists and record
labels) for whose catalbg Licensor may grant digital distribution rights,
including, but not limited to, those granted under-this Agreement, and further
including
those Persons fOr whose catalogs Licensor has at execution
and/or acquires such rights during and throughout the Term of this
Agreement.
"Secured
Server"shall mean a server that Is owned and operated by Licensee or
Licensee's vendor and protected by means of (a) reasonably physical security
that meets or exceeds the prevailing physical security practices in the industry
and (b) reasonable
firewall and/or other digital security technology that meets or exceeds
the prevailing digital security technology practices in the
industry.
"Service"shall mean the online service owned and operated by Licensee,
in
substantially the form described in Exhibit "A" hereto, which offers Users
Limited Music Downloads, Music Streams, Limited Video Downloads and/or Video
Streams transmitted from Secured Servers to the Covered Devices of Users In
accordance with the terms and conditions of this Agreement and is supported
by
third-party advertising.
"Service-wide
Music Plays"are the total number of instances where Users cause
Master Recordings of third parties contributing Master Recordings to the Service
to be heard in their entirety on a Covered Device, when such content was
originally delivered to the Covered Device as limited-use
downloads.
"Service-wide
Music Streams"shall mean the total number of encrypted digital
transmissions from Secured Servers via the Service of Master Recordings of
third
parties contributing Master Recordings to the Service that allow Users to
receive and listen to those particular Master Recordings upon request at a
time
chosen by the User using streaming, technology (including, without limitation,
via Real Networks' RealAudio or Microsoft's Windows Media Audio formats) through
the User's Covered Device, which transmissions will (a) not result in a
substantially complete portable reproduction of such Master Recording (other
than a temporary copy such as those used solely for caching or buffering) and
(b)
occur
substantially contemporaneously with the play of the given
Master Recording.
"Service-wide
Video Plays"are the total number of instances where Users cause
A/V Master Recordings of third parties contributing A/V Master Recordings to
the
Service to be heard in their entirety on a Covered Device, when such content
was
originally delivered to the Covered Device as limited-use
downloads.
"Service-wide
Video Streams"shall mean the total number of encrypted digital
transmissions from Secured Servert via the Service of A/V Master Recordings
of
third parties contributing A/V Master Rectirdings to the Service that allow
Users to receive, view, and listen to thOse particular A/V Master Recordings.
upon request at a time chosen
by
the U.Ser using streaming technology (including, without limitation, via Real.
Networks' RealAudio
or MicrOsoft'S Windows Media Audio forMats) through the User's COvered
Device, whiCh transmissions will (a) not result in a substantially complete
portable reproduction of such A/V Master Recording (other than a temporary
copy
such as those used solely for caching or buffering) and (b) occur Substantially
contemporaneously with the play of the given A/V Master Recording.
"Territorrshall"mean the universe, with the exception of any.excluded
territories set forth in Exhibit "C," in the metadata .accompanying the LicenSed
Content or of Which Licensor has otherwise notified Licensee. In writing
according to the terms of Sections.4 and 13 of the Standard Terms and
Conditions.
"User"shall mean any individual who is a registered user of the
Service, having agreed to Licensee's user agreement, and who Is authorized
by
Licensee to access Limited Music Downloads, Music Streams, Limited Video
Downloads and Video Streams
and/or any individual who uses the. Service solely to access 30-second
Music
Streams or 30-second Video
Streams, via the Service solely for personal, noncommercial use.
"Video
Play"shall mean each instance whereby a User causes an A/V
Master Recording to be heard and seen in its entirety on a Covered
Device, when such content was originally delivered to the Covered Device as
a
Limited Video Download.
'Video
Stream" shall mean an encrypted digital transmission from
Secured Servers via the Service that allows a User to receive, view, and listen
to a particular LicenS0rowned A/V Master Recording upon request at a time
chosen by the User using streaming technology (including, without limitation,
via Real Networks' RealAudio or Microsoft's Windows Media Audio formats)
through the User's Covered Device, which transmission will (a) not result in
a
substantially complete portable reproduction of such A/V Master Recording (other
than a temporary copy such as those used solely for caching or buffering) and
(b) occur substantially contemporaneously with the play of the given A/V Master
Recording.
2.Licensee
Service Obligations.
(a) Service
Operation. Licensee will be responsible for all DRM encoding,
hosting, serving and providing clearinghouse and other functions necessary
for
the operation of the Service in accordance with the terms and conditions of
this
Agreement.
(b) User
Agreement. Licensee shall require each User to enter into a user
agreement which prohibits further distribution of the Licensed
Content.
(c) Limitations
on User Access. Licensee's user agreement shall
state that each
User shall only be authorized to access Limited Music Downloads, Music
Streams, Limited Video Downloads, Video Streams and Lyric Displays through
the
Service on, and for each User Covered Devices shall only include up to one
(1)
Personal Computer and up to two (2) Portable Digital Music Devices.
(d) Buy
Link. Upon a User's selection of Licensed Content, Licensee
will
ensure that Users have access to a "buy button" or similar hyperlink, through
which the User can purchase permanent copies (in electronic and/or physical
format) of the applicable Licensed Content (with respect to which Licensor
is
compensated under Third Party Financial Arrangements).
(e) Join
Button. Subject to Licensor providing adequate technical and
marketing
resources necessary, Licensee shall provide and display a "Join Button" in
connection with the Licensed Content; allowing Users to register with Licensor
or to join the Licensor-provided fan clubs, such that Users can thereafter
receive information directly frorri Licensor about the band, notices of
concerts, new album releases, special offers from the artist related to a
specific unit of Licensed COntent,
(f)Metadata.
Licensor will provide Licensee with all metadata associated with the Licensed
Content. Licensee shall use commercially reasonable efforts to
use 11 metadata delivered by Licensor to Licensee hereunder. Licensor shall
deliver such metadata to Licensee via FTP in either XML or tab delineated format
or as otherwise mutually agreed between the parties in writing. Notwithstanding
anything to the contrary contained in this Agreement, Licensor shall retain
all
right, title and interest in and to any Licensor-provided metadata delivered
hereunder.
(g) Security
Compliance.
(i) In
connection with any use of Licensed Content, Licensee shall implement and
maintain copy protection and DRM technology and systems, consistent with
accepted industry practices (collectively, "Security
Systems") with respect to the Service under its
supervision and/or control, Including Secured Servers and operating systems,
that:
(A) are
designed to prevent unauthorized reproduction and distribution of Licensed
Content;
(B) encrypt
Licensed Content with a reasonably current version of DRM technology accepted
within the industry;
(C) are
sufficient to track and enforce the use and other license limitations
contemplated by this Agreement; and
(D) generally
meet or exceed accepted industry practices for the licensed delivery of music
via digital transmission.
Provided
however, Licensee may distribute MP3 files in an unprotected format when the
distribution of such files Is expressly approved by Licensor.
(ii) If
Licensor has a good-faith basis to believe that Licensee is in compliance with
such Security Systems, Licensor shall be entitled, upon thirty (30) business
days' prior written notice to Licensee, to conduct or have a third party conduct
an examination (a "Security Compliance Examination")
of the operations and Security Systems
of Licensee solely with respect
to rights covered by this Agreement. Licensee shall make commercially reasonable
efforts to cooperate with Licensor and/or Licensor's qualified designated
representative regarding such Compliance Examination. Licensor shall not conduct
any Security. Compliante Examinations of Licensee more frequently than once
every twelve (12) months.
3. Accounting.
(a) Payment
Process. Licensee shall pay royalties due to Licensor hereunder
within sixty (60) days after the end of each quarterly accounting period (or
partial period in
the event of an early termination or expiration before the calendar
close
of such quarterly period) by wire or ACH banking transfer, provided Licensor
provides
such bank account and related information to Licensee in writing Within
a
reasonable period of time.
(b) Accounting
Statements. In connection with each royalty payment hereunder,
Licensee shall provide Licensor with an electronic statement ("Statement")
which
shall set forth aggregate User consumption history of the
Licensed Content in sufficient detail to determine Music Royalties and Video
Royalties Payable hereunder. Each statement shall also include detail on the
relevant Master Recordings and A/V Master
Recordings distributed to Users via the Service as (i) Limited Music
Downloads, (ii) Limited Video Downloads, (iii) Music Streams and (iv) Video
Streams.
(c)Audit.
Licensor shall be entitled, once during every calendar year, upon at least
thirty days' prior written notice, to examine the books and records of Licensee
to determine the accuracy of Licensee royalty statements (a "Royalty
Examination").
Such Royalty Examination shall be conducted by a certified
public accountant in good standing with experience in digital music royalty
payments. Such Royalty Ekamination shall take place at Licensee's place
of
business during normal business hours, in a manner designed to be as
non-disruptive to Licensee's business as possible.
Licensor shall not conduct an audit more frequently than
once
every
twelve (12) months.
(d) All
statements rendered by
Licensee
shall be incontestable
within three (3) years of the date due, unless an objection
in
writing is made for each such
statement. Any objection
must specify, with particularity, the reason for such objection, and if an
audit is to be
conducted with respect to such statement, it must be conducted within
three (3) years of
the issuance of such statement.
Notwithstanding
any applicable statutes
of limitations, Licensor waives any action brought in connection
with an audit of
any royalty statement unless such action is brought within one (1)
year of the date
of the commencement of any such audit.
(e) If
Licensee
is required by law to. withhold any taxes or other moneys ("withholdings")
from
any payMent due to Licensor, Licensee will deliver to Licensor an offitial
receipt evidencing Licensee's payment of the tax or other amount withheld and
such other docuMentation as Licensor may require to obtain credit against
Licensor's taxes for the withholding concerned. If that documentation is not
fUrnished or if that tax credit is not available to Licensor, Licensee will
bear
the obligation concerned at Its own expense without recourse to Licensor and
will remit the full amount of the payment Concerned'to Licensor without
deduction; if the withholding COncerned has already been deducted from payments
to Licensor, Licensee will remit the arneunt of the withholding to Licensor
upon
Licensor's request.
(f) All
payments
to Licensor shall be computed and remitted in United States dollars. Each
conversion frOm another currency for the purpose of computing such payments
shall be calculated at the rate of exchange in effect on the last day of the
accounting period concerned.
(g) If
Licensee is actually prevented
by law or government order from making any payment to Licensor in United.
States Dollars, Licensee will
promptly notify Licensor and will
not commingle the moneys concerned
with Licensee's other assets or with the property of any other person
or
entity, but will hold those moneys separately and in trust for Licensor or
deposit them as Licensor instructs in writing. Licensee will continue to be
obligated for each such amount, with interest at the local equivalent "prime"
commercial rate, until Licensor (or the depository.So designated
by
Licensor) has actually received it.
(h) N
and
when available, Licensee shall permit Licensor on-line access to portions of
Licensee's sales reporting system to allow Licensor to monitor its sales and
estimated royalty activity hereunder.
(i) In
addition to the foregoing, if Licensee makes available to all other licensors
weekly reports that state when Licensed Content first becomes available to
Users, then Licensee will provide such a report to Licensor.
4. Licensed
Content List I Takedown Procedure.
(a) The
rights granted hereunder shall apply solely to the Master Recordings
and A/V Master Reccirdings set forth on the Licensed Content List, attached
hereto as Exhibit "A". Licensor will deliver, and Licensee may provide to its
Users, new Licensed Content, as soon as Licensed Content is delivered by
Licensor, but no less often than LiCensor updates its other digital-service
and retail partners.
Such delivery of the Litensed COntent serves to automatically
add new Licensed Content to the Licensed Content LiSt. Additionally, Licensor
will provide Licensee a complete, updated Licensed COntent List (Including
both
additions and subtractions)
periodically,
but no less often than Licensor updates its other
digital-service and retail partners. The Licensed Content List shall include
at
least all Master Recordings, A/V Master Recordings and Related Content as
licensed to the digital. music provider
that
has received the largest number of Master Recordings and A/V Master Recordings
owned/controlled by LiCensor. If Licensor provides additional Master Recordings
or A/V Master Recordings to any other third-party digital music or digital
Music
video service, then Licensor shall deliver such additional Master Recordings
and/or A/V Master Recordings to Licensee at the same time. Notwithstanding
the
fOregOing subparagraph 4(a), Licensor shall not be considered in breach of
subparagraph 4(a) if Licensor fails to deliver those MaSter Recordings and
A/V
Master Recordings that are delivered to third-party online retailers or service
providers on an exclusive basis under written agreement ("Exclusives"); provided
however, Licensor will provide Licensee the ExclusiveS immediately when
available pursuant to such written agreement and Licensor and Licensee shall
also discuss such special
promotions on a mutually beneficial basis. Licensee agrees to
abide by any reasonable territory restrictions communicated to Licensee by
LitenSor in writing according to the terms of Sections 4 and 13 of the Standard
Terms and Conditions {including in the metadata
accompanying the Licensed COntent, Exhibit"C" or otherwise).
(b) If
any Licensed Content ceases to be owned or controlled by Licensor for
any
reason, or if a third party formally challenges Licensor's rights in a Master
Recording and/or A/V Master Recording where such challenge may have a material
affect on the rights granted under this Agreement, then upon Licensor's written
notice and request, Licensee shall remove access to such Master Recording and/or
A/V Master Recording from the Service within three (3) business days of such
request. Licensor shall not exercise the takedown right described in this
paragraph in a manner that would defeat or frustrate the rights granted to
Licensee under theAgreement unless such exercise of the takedown right is
reasonably necessary to protect Licensor's interests.
(c) Licensee
shall not exploit the rights conveyed herein relating to any LicenSed
Content prior to the official USA release date of an album embodying such
Licensed Content, provided Licensor prgvides Licensee with sufficient advance
notice in writing. Further and notwithstanding the foregoing, Licensee
may.exploit those rights conveyed herein before such release. date to
the extent
that Licensee must reproduce Licensed Content to receive, store, and prepare.
its availability to Users (for example, as ephemeral copies) without
distributing it to Users.
5. Licensee's
Third-Party
Obligations. Except as specifically set forth herein,
Licensee
will be solely responsible for procuring any and all licenses, clearances and/or
consents that may be required to operate, or from the operation of, the Service
as contemplated hereby. Without limiting the generality of the foregoing,
Licensee will be responsible for all payments required to be paid in connection
with public performance licenses, digital phonorecord delivery mechanical
licenses, and, if applicable, synchronizatiOn licenses, from owners and/or
administrators of music composition copyrights (or their agents, including,
without limitation, performance rights societies, mechanical collection
societies and other bodies) in connection with the Service.
6. Licensor's
Third-Party Obligations.
(a) With
respect to Licensed Content, Licensor shall be responsible for any sound
recording rights, licenses, clearances and/or consent, all related payments,
including, but not limited to, all associated so-called "record royalties"
that,
as a result of the Service, may be required for, or due to, an artist and any
other third party record royalty participants (e.g., an artist or producer).
In
addition, Licensor shall be responsible for any payments that may be due to
the
Musical Performance Trust Fund and the Administrator of the Special Payment
Fund
of the American Federation of Musicians, and any similar fund established by
a
collective bargaining agreement within the recorded music industry.
(b) Licensor
shall provide, and shall bear sole responsibility to provide, any necessary
parental advisory warnings (if and to the extent artists and record labels
furnish same to Licensor) in connection with the Licensed Content.
7.Intellectual
Property
(a)Ownership
of Licensed Content. All right, title and interest in and to the Licensed
Content, including all intellectual property rights inherent therein are owned
and retained exclusively by Licensor.
(b) Ownership
of Licensee Service and related systems. As between Licensee and Licensor,
Licensee owns all right, title and interest in and to the Service (subject
to
ownership of Licensed Content as described in paragraph 7(a)), Including all
intellectual property rights in and to all elements and components related
thereto, and all goodwill associated with the Service will inure solely to
the
benefit of Licensee. Licensor understands and agrees that it shall not acquire
any right, title or interest in or to the Licensee Service, or any part thereof,
by reason of this Agreement or the performance hereof. All rights not
specifically granted herein with respect to the Service are reserved to
Licensee. Licensor will not contest, or assist other non-affiliated parties
in
contesting, Licensee's rights and interests in the Service or the validity
of
such ownership {including all intellectual property rights in and to all
elements and components related thereto).
(c)
Consumer Data. Licensee shall be the sole owner of any and all
demographic and User data related to the Service, including, but not limited
to,
survey information, IP
addresses, User activity, cookies and email addresses. To the extent
practicable and at Licensee's discretion, Licensee shall provide Licensor with
anonymous, aggregate consumer data related to Licenser's Licensed
Content.
8.Reoreoentations.
Warranties
and Covenants; Indemnity.
(a) Each
Party represents to the other Party that:
(i) such
Party has the full right, power and authority to execute, deliver
and perform this Agreement and to consummate the transactions contemplated
hereby;
(ii) the
execution, delivery, and performance of this Agreement and the consummation
of
the transactions contemplated hereby have been duly authorized by all necessary
corporate action;
(iii) this
Agreement has been duly executed and delivered by an authorized officer, and
is
a legal, valid and binding obligation enforceable against such Party in
accordance with its terms, except as enforcement may be limited by general
principles of equity (regardless of whether such enforceability is considered
In
a proceeding at law or in equity) and the effect of applicable bankruptcy,
insolvency, moratorium and other similar laws of general application relating
to
or affecting creditor's rights generally, including the effect of statutory
or
other laws regarding fraudulent conveyances and preferential
transfers;
(iv) the
execution, delivery and performance of this AgreeMent will not constitute a
breach or default under any contract or agreement to which such Party is a
party
or by which such Party is bound or otherwise violate the rights of any third
Person;
(vi) that
Party's
performance hereunder will not violate federal, state
or
local laws, regulations and ordinances; and,
(v) no
consent, approval or authorization of or from any governmental entity or any
other Person not a party to this Agreement, whether prescribed by law,
regulation, contract or agreement, is required for its execution, delivery
and
performance of this Agreement or consummation of the transactions contemplated
hereby.
(b) Licensor
hereby warrants and represents to. Licensee
that:
(i) Licensor
owns or controls the Licensed Content and has the right to
grant all rights contained herein to the Licensed Content;
(ii) Licensor
is a duly organized and existing company in good standing under the laws of
its
place and country of formation, and has the exclusive right, power and authority
to enter into this Agreement, to grant the rights agreed to be granted by
Licensor hereunder.
(iii) Licensor
has not made and will not make any grant, assignment, commitment, license or
do
or permit any act which will or might materially interfere with or impair the
full and complete performance of Licensee's full and complete enjoyment and
exercise of the rights and privileges granted herein.
(iv) There
are
no liens, claims or encumbrances which might conflict with or otherwise affect
any of the provisions of this Agreement or Licensee's promotion or exploitation
of the Licensed Content in any and all media whether now known or hereafter
devised throughout the universe in perpetuity.
(c) Licensee
hereby represents and warrants to Licensor that:
(i) it
shall take all reasonable steps necessary to implement and shall
comply with its security obligations set forth in this Agreement;
and,
(ii) all
of the Licensed Content and related artwork and metadata shall
only reside on.serVers owned, authorized or controlled by Licensee.
(d) Licensee
agrees to indemnify, defend.and hold harmless Licensor, ("Inclamniteel"from and against any kisses, injuries, darnages, claims,
expenses and
costs (including without limitation reasonable attorneys' fees)
("Claims") incurred or suffered by Indemnitee, arising from any
third-party actions, claims, suits or legal proceedings Of any kind, caused
by,
arising from or related to:
(i)
Licensee's failure to perform any of its obligations under this Agreement and/or
any breach or alleged breach of any representation or warranty
hereunder;
(ii)
the
operation of the SerVite or Licensee's business; and
(iii)
any
acts or omissions of any Licensee employee or agent. Licensor shall promptly
notify LiCensee In writing of any Claim and allow Licensee to control the
defense thereof
(e) Licensor
agrees to indemnify, defend and hold harmless Licensee, its respective
officers; employees and agents, (colleCtively, the 'Licensee
Indemnitees")
from
and against any losses, Injuries, damages, claims, expenses.
and costs
(Including without limitation reasonable attorneys' fees) ("Claims").incurred
or suffered by any Licensee Indemnitee, arising from any third-party actions,
claims, suits or legal proceedings of any kind, caused by,. arising from or
related to: (i). Licensor's failure to perfprm any of its obligations
.underthis.
Agreement and/or any breach or alleged breach of any representation or warranty
hereunder; and (ii) any acts or omissions. of any Licensor employee or agent.
Licensee shall promptly notify Licensor in writing of any Claim and allow
Licensor to control the defense thereof.
9.Termination;
Survival,.
(a) Licensor
shall have the right to terminate this. Agreement after providing thirty (30)
days' prior written notice to Licensee in the event of a material breach of
any
provision of this Agreement, only if during such thirty (30) day period,
Licensee fails to cure such alleged breach. The foregoing notice and cure period
shall not apply in the event: (i) Licensee breaches in a material respect
Section 4 of the Standard Terms and Conditions above, or (ii) if Licensee
purports to assign any of its rights and/or obligations hereunder to a third
party except as specifically permitted hereunder, without Licensor's prior,
written consent.
(b) Licensee
shall have the right to terminate this Agreement at any time on thirty (30)
days' prior written notice to Licensor, in the event of a material breach of
any
provision of this Agreement, only if during such thirty (30) day period,
Licensor fails to cure such alleged breach.
(c) All
representations, warranties and indemnities shall survive expiration or
termination of this Agreement.
(d) Within
ninety (90) days after the effective date of any termination under this
paragraph, each User's rights to the Licensed Content shall lapse.
(e) This
subparagraph 9(e), paragraphs 8, 11, 14, 15, 17, and 18 and those
obligations of this Agreement that may reasonably be expected to survive the
termination or expiration of this Agreement shall survive the termination or
expiration of this Agreement
10.Assionment.
This
Agreement shall not be assignable by either without the
prior
written consent of the non-assigning party and any such assignment shall be
invalid ab initie. Notwithstanding the preceding sentence; either party may
assign this Agreement in conjunction with a transfer, Merger and/or acquisition
of a substantial portion of the assigning party's buisness, stock, or assets,
or
to any entity controlled by, controlling or under common control with the
assigning party.
11.Choice
of
Law.
The
parties
.agree that it is to their mutual benefit that their
respective rights and obligations under this Agreement are guided by, and their
disputes hereunder are determined In accordance with,.a well deVeloped body
of
law. Accordingly, the parties agree that the validity, interpretation and legal
effect.of this Agreement shall be governed by the internal laws of the State
of
New York, U.S.A., applicable to contracts entered in and performed entirely
within the State of New York, U.S.A. The parties agree. that any legal suit,
action or proceeding arising out of pr relating to this Agreement must be
instituted in New York, and LicensOr and Licensee each
(i) irrevocably
submits to the exclusive jurisdiction of the United States District Court for
the Southern District of New York, or the Supreme Court of the State of New
York, County of New York, and
(ii) waives
any
objection to the waving of any suit, action or proceeding or any claim to forum
non convenins. In any such suit, action, or porceedings, any summons order
to show cause rit, judgement, decree, or other process may be delivered
tolicensor or licensee outside of New York or outside of the United States
and
when so delievered such party will be subjected to the jurisdiction to such
court.Served within the state of New York will be subject action
or proceeding is pending. In any action subject to this suit the pervating
party
will be entitled to the awarding of an attorneys fees.
12. No
Partnership.
Nothing
contained
herein shall be construed to place the
parties in the relationship of partners or joint venturers, and Licensee shall
have no power to obligate or bind Licensor in any manner
whatsoever.
13. Notices.
All
notices
required hereunder shall be in writing and shall be given
either by personal delivery, teleoopy or by registered or certified mail
(postage prepaid), and shall be deemed given hereunder (unless actual receipt
is
hereinabove required) on the date delivered, telegraphed, telecopied or telexed
or a date forty-eight (48) hours after the date mailed. Until further notice,
the addresses of the parties shall be as follows:
The
Orchard Enterprises, Inc. 100 Park Av., 17th floor
New
York,
NY
10017
Attn:
Legal Dept.
Each
party will provide current contacts for each of technical, marketing, content,
financial and publicity matters. Licensor will provide notices regarding
territorial restrictions in the metadata accompanying the
Licensed Content. The initial list of such contacts for each party is
attached as Exhibit E.
19
14. Confidential
Information,
(a) The
Party
receiving Confidential Information shall not disclose the Confidential
Information of the disclosing Party, except as permitted under this Agreement.
All Confidential Information will be held and protected by the receiving Party
in confidence and will be used and disclosed by the receiving Party only as
required to render performance or to exercise rights and remedies under this
Agreement. The foregoing shall not apply to any information generally available
to the public, independently developed, or lawfully and independently obtained.
The receiving Party may disclose the disclosing Party's Confidential Information
to its officers, directors, employees, legal representatives, accountants,
tax
advisors, agents and contractors, on a need-to-know basis. Notwithstanding
the
foregoing, this Agreement and its contents may be disclosed by Licensee to
a
third party under appropriate confidentiality requirements in connection with
(i) a due diligence examination being conducted by such third party in
connection with the corporate organization, reorganization, or capitalization
of
Licensee; (ii) subject to a court order or subpoena; or, (iii) as required
in a
case brought by or against a party hereto.
(b) The
disclosing Party's Confidential Information is and will remain the property
of
the disclosing party, and no disclosure under this Agreement grants or confers
any ownership rights in or license to any of that information to the
non-disclosing party (excluding express licenses and grants set forth in this
Agreement).
(c) Promptly
upon expiration
or termination of this Agreement and upon the request of the disclOsing Party;
the receiving Party will either:
(i) return
to the
disclosing Party all of its Confidential InfOrmation; or
(ii) destroy
all of such
disclosing Party Confidential Information and certify to such destruCtion in
writing.
14a. Public
communications.
Neither
party
hereto shall, without the prior written consent of the other party, issue any
press release or make any other public announcement or statement relating to
any
terms and conditions of this agreement or any fact, matter, event or surrounding
circumstance leading to or relating to the negotiation thereof to which such
party was privy or of which it was otherwise made aware.
14b.Coovright Notices.
Licensee
shall cause all copyright notices relating to uses of Licensed Content to be
conspicuously displayed upon the web page by means of which Licensee's customers
commence use of the Licensed Content and related metadata. Each copyright notice
shall be displayed in the following format, as designated by Licensor in each
instance for the download concerned: "(P) (C) [Year of first publitation]
[Licensor-designated name]." Licensee shall not, through its acts or omissions,
defeat, impair or alter in any way any copyright protection technolOgyf metadata
or
mechanism embedded in or associated with the Licensed Content or any related
artwork or materials deliVered by Licensor hereunder. Litensee shall not
contest, or voluntarily assist others in contesting, Licensors rights or
Interests in the Licensed Content or the validity of such ownership at any
time,
during or after the Term.
15. Entire
Aareement / Amendment
This
Agreement, including all exhibits, schedules and attachments hereto
(incorporated herein by this reference), represents the entire understanding
of
the parties with respect to the subject matter hereof, supersedes all prior
and
contemporaneous agreements and understandings of the parties (whether written
or
oral) with respect to the subject matter hereof. This Agreement may not be
altered or amended except in a written instrument executed by authorized
representatives of both parties. This Agreement shall be deemed to exist and
the
parties intend to be bound only upon signature of a written agreement by both
parties, and no negotiation, exchange of draft or partial performance shall
be
deemed to Imply an agreement or other understanding between the
parties.
16. Force
Maieure.
Neither
party
shall be liable to the other for any failure or delay caused by events beyond
the parties' control, including, without limitation, sabotage, failure or delays
In transportation or communication, failures or substitutions of equipment,
labor disputes, accidents, shortages of labor, fuel, raw materials or equipment,
technical failures, fire, flood, war, blockage, acts of public enemy, civil
disturbance, and/or any resultant interruption in public services, including
mail delivery (except that no such event shall excuse performance hereunder
for
an excess of three (3) months).
17. Waiver:
Severabilitin Headings: Counterparts.
No
right that
either party has regarding this Agreement may be waived or modified except
by
the waiving party In writing. If any provision of this agreement is held to
be
invalid or unenforceable, the remainder shall remain in full force and effect.
The diviSion of this Agreement into sections, clauSes, paragraphs or
subdivisions thereof, and the insertion of headings; are for convenience and
referente only and shall not affect the construction or interpretation hereof.
This Agreement may be executed in one or more counterparts, each of which shall
be deemed to be an original, but all of which shall be one and the same
document. A copy or facsimile of a signature shall be binding upon the signatory
as If It were an original signature.
18. limitation
of Liability.
IN
NO EVENT
SHALL EITHER PARTY BE RESPONSIBLE FOR ANY CONSEQUENTIAL, SPECIAL, PUNITIVE
OR
OTHER INDIRECT DAMAGES, INCLUDING, WITHOUT LIMITATION, LOST REVENUE OR PROFITS,
IN ANY WAY ARISING OUT OF OR RELATED TO THE AGREEMENT, EVEN IF THE AFFECTED
PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, UNLESS DUE TO
THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF
THE NON-AFFECTED PARTY.
-
End of
Standard Terms and Conditions -
Exhibit
"A"
Service
Description
The
SpiralFrog TH
service
is a broadband. Internet-based entertainment destination
that gives registered users the opportunity to experience entertainment content,
including music and video'downloads, in exchange for viewing advertising.
Initially, SpiralFrog will offer tethered audio and video downloads using
Windows DRM with a license that expires after 30 days, as well as music and
video streaming. Once downloaded, users must sign-in to the service at least
monthly, which will automatically renew all licenses for that user. Songs may
be
downloaded to one computer and can be synchronized with up to two portable
devices, complete with the same license.
Revenue
will be generated by targeting advertising to those users who have been
unwilling:to pay for their digital downloads, giving a revenue stream back
to
the rights owners. Record labels and publishers will receive .a pro-rata
share of revenue derived from the total advertising dollar pool, apportioned
by
the number of plays of each digital file of their Licensed Content downloaded
whether that be on the local computer or a portable device.
User
Experience
1.
Users
will register with the service with:
a. Age
(13
& over)
b. Zip
code,
(US), or Rasta! Code, (International)
c. Gender
d. Email
address
2.
They
will choose a personal userid.
3. Users
will login to the service using their personal userids
4. Registered
users will immediately experience targeted ads at login.
5.
Users may engage in various activities during which time they Will be presented
with ads:
a. Search
or
discover music
b. Search
or
discover music videos
c. Play
30-second clips of music
d. Stream
music videos
e. Click
through to etailers
f. Engage
in
other miscellaneous entertainment.
6.
Core
Activity — Music
and
Video
DbOgridaels;
a. Registered
users search for music tracks or music videos
b. Registered
users select a track or video to download.
c. Tracks
and videos may be
queued for download
d. Tracks
and videos are downloaded. Each track or video is downloaded
individually.
e. Downloads
are timed at 90 seconds whereas video.downloads are timed 4120
seconds
f.
At
the end of each download users must verify completion of the download
by
keyword
identification
9. All
downloads
are created with Windows DRM
h.
Registered
users may use downloaded tracks and videos to create faVorites listathat
can be shared with other users
i. Registered
users
may syrichroniZe, (copy), downlOaded tracks to up to two portable
devices, (digital music-players and mobile phones, etc.) that support Windows
DRM. 7. Other activities.
a.
Lyric
search – Lyrics will be displayed alone, with ads in a separate browser
window, with the print/cut/paste functionality
disabled.
b.
Referral
out to e7comnierce
partners, including CD purchases, tour information, tickets; and
the
like.
Anticipated:
entertainment news, comedy and action shorts, Online entertainment communities,
celebrity chats; contests, plus a full range and menu of interactive
entertainment through strategic partnerships with the music industry, digital
music player manufacturert, cable TV networks, and ether content
providers
Exhibit
"C"
Excluded
Territories
Licensor
Direct Delivery Charges - Rate Card
A. For
all of Licensor's current catalog of Licensed Content listed on Exhibit
B
(approximately
450,000 tracks), delivered via hard drives containing WMA files (encoded at
192Kbps) for audio and a format to be mutually agreed by the parties for
video:
n
A
fee of USD$50,000.00 (payable within 5 business days of complete,
Initial
delivery of Licensor's catalog as of the date of such delivery, according
to the terms of Section 1A of the
Agreement.)
n
Shipping
paid by Litensee
B.For
all
subsequent Licensed Content delivered by Licensor during the Term:
·
USD$0.20
per track, delivered via 250 gig hard drive (payable within 5 days
of
complete delivery according to the terms of Section 1A of the
Agreement)
·
Each
250 gig hard drive holds approximately 5,000 way
files, XML
and album artwork;
notwithstanding the foregoing, the files will be delivered using
WMA
files
(encoded at 192Kbps) for audio and a format to be mutually determined
by
the parties for
video.
·
Shipping
paid by Licensee
Exhibit
"D"
Exhibit
E Contacts
Licensor
contacts:
Senior
Management: Legal
/ Business Affairs:
Greg
Scholl, President &
CEO Stanley
Schneider, SVP & General Counsel
