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EXHIBIT 10.13
MUSIC CONVERSION AGREEMENT
This Agreement is made as of November 1, 1998 (the "Effective Date") by and
between Xxxxx-XxXxxxxx LLC, with it principal place of business at 000 Xxxxxx
Xxxxxx Xxxxx, Xxxxx 000, Xxxxxxx Xxxxxxxxxx 00000 ("EM") and Avtograf, a Russian
Joint Stock Company with its principal place of business at CJSC Printing
Office, Xxxxxxxx, Xxxxxxxxx Xx. 0 Xxxxxxxxxxx, Xxxxxx 000000 ("Engraver").
RECITALS
A. Engraver wishes to engrave sheet music for EM in accordance with the terms
set forth herein using Sunhawk Corporation's ("Sunhawk's") Solero(TM) Music
Editor software.
B. EM wishes to retain Engraver to engrave the sheet music.
NOW, THEREFORE, in consideration of the premises and mutual covenants and
agreements set forth herein, EM and Engraver agree as follows:
SECTION 1
DEFINITIONS
1.1 Music Title. "Music Title" means a specific printed music
composition which may consist of one or more pages. (For example, two pages of
sheet music for "Fur Elise.")
1.2 Source File. "Source File" (also called "Work Space") means a single
page of music in digital form which has been prepared by scanning the Music
Title and converting it into a format which can be used by the Solero Editor
software.
1.3 Source Materials. "Source Materials" means any copies of Music
Titles in original sheet music form, audio recordings, or other source materials
which are provided to Engraver concerning the Music Title.
1.4 Specifications. "Specifications" for the Final File shall be as set
forth in Schedule "A" of this Agreement. The Specifications includes examples,
quality standards and a description of the features and characteristics which
the Final File must have before EM will accept it.
1.5 Solero Editor. "Solero Editor" means the Sunhawk Solero Music Editor
software as well as any templates, editing tools, documentation, instruction
files, instruction manuals, and any other files, programs or other materials
provided for use in converting the Source Files into Final Files.
1.6 Engraving Work. "Engraving Work" means the music engraving and any
editing changes, modifications, conversions, and additions which are prepared by
Engraver from the Source Files and Source Materials using the Solero Editor.
1.7 Final File. "Final File" means the file which is prepared by
Engraver using the Source Materials, Source File(s) and the Solero Editor which
Engraver believes in good faith to conform to the Specifications. The Final File
will contain a combination of Engraving Work provided by Engraver, and
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Source File and Source Materials provided by EM or Sunhawk from which Engraver
produced the Engraving Work. A Final File will contain one or more Pages.
1.8 Page. "Page" means a page of music in a Final File which is
considered by the Solero Editor software to be a full page of music.
SECTION 2
CONVERSION AND DELIVERY OF DELIVERABLES
2.1 Conversion; Progress Reports. Engraver shall convert the Source
Files into Final Files in accordance with the Specifications. Engraver will
regularly report on the status of engraving work and promptly notify EM upon the
discovery of any problem that may delay development work. While EM agrees to
provide reasonable technical support for the Solero Editor, Engraver
acknowledges that it is its responsibility to become proficient in the use of
the Solero Editor. The use of the Solero Editor software is subject to
Engraver's acceptance of the terms and conditions of the separate "Combined
Solero Editor and Viewer License Agreement."
2.2 ALL DEVELOPMENT WORK WILL BE PERFORMED BY PERSONS WHO HAVE SIGNED
CONFIDENTIALITY AND EMPLOYMENT/INDEPENDENT CONTRACTOR'S AGREEMENTS THAT ARE
ACCEPTABLE TO EM. Upon request, Engraver will provide EM with copies of all such
signed agreements.
2.3 Delivery. Engraver shall deliver Pages within the times specified in
the Delivery Schedule "B" which lists the Pages contracted for and the deadlines
for their delivery. Failure to deliver Pages on the dates set forth in the
Delivery Schedule shall be deemed a material breach of this Agreement.
2.4 Delivery of Source Materials. Upon request by EM, Engraver shall
either deliver to EM, or destroy, all corresponding Source Files and Source
Materials.
SECTION 3
TESTING AND ACCEPTANCE; EFFECT OF REJECTION
Testing and Acceptance Procedure. All Final Files shall be
thoroughly reviewed by Engraver and all corrections shall be made prior to
delivery to EM. Upon receipt of a Deliverable, EM will, in its sole discretion
either: i) accept the Final File and make the payment set forth in Schedule "B";
or, ii) provide Engraver with written notice of the aspects in which the Final
File contains errors or does not conform to the Specifications and request that
Engraver correct said Final File.
SECTION 4
OTHER OBLIGATIONS OF ENGRAVER
Product Quality. Engraver agrees that the Final Files will be of
high quality and will conform in all respects to the Specifications. Engraver
agrees to fix at its own expense any errors which may be discovered in any Final
File for a period of one year after the date of acceptance of the Final File by
EM. Engraver further agrees to inform EM promptly of any known errors in the
Final Files.
SECTION 5
PROPERTY RIGHTS
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5.1 Property Rights. Assignment of Rights. Engraver acknowledges and
agrees that Sunhawk owns all rights in the Solero Editor, Source Files, Source
Materials and any other materials or information provided to Engraver, subject
to the ownership of any underlying music by Sunhawk's music publisher licensors.
Engraver agrees to transfer and assign, and hereby transfers and assigns
to EM all its exclusive material copyrights, patent, trademark, trade secret and
other intellectual property rights, no matter when acquired, in the Engraving
Work (collectively "Proprietary Materials").
Title to all mentioned rights in the Engraving Work shall remain with
EM. Except as expressly provided in this Agreement in order for Engraver to
convert the Source Files into Final Files, no license or other rights in the
Proprietary Materials is granted hereby.
Except as necessary to prepare the Final Files for EM, Engraver shall
have no right to copy, license, sell, distribute or otherwise use the Source
Files, Source Materials, Final Files, or Engraving Work.
5.2 During and after this Agreement, Engraver will assist EM to
establish original ownership of all such exclusive material rights in the
Engraving Work on the part of EM. Engraver will assist EM in the filing of
registrations in Sunhawk's name and will assist EM to secure maintain and defend
all copyrights, patent rights, trademarks, trade secret rights and other
proprietary rights in and to the Engraving Work. Engraver will sign any
additional assignments or agreements which may be required in order to assign
and transfer all exclusive material rights which Engraver may possess in the
Engraving Work to EM.
5.3 EM may modify the Engraving Work according to the purpose of its
creation or within the scope of its business activity.
5.4 Engraver authorizes EM publish the Engraving Work in any form.
Engraver authorizes EM to use the Engraving Work without indication of
Engraver's name. Engraver authorizes EM to use the Engraving Work with
indication of EM's or Sunhawk's name.
SECTION 6
CONFIDENTIALITY
6.1 Confidential Information. The terms of this Agreement, Source Files,
Solero Editor, Source Materials, Working Materials, and Final Files, and any
other source code, computer program listings, techniques, algorithms and
processes and technical and marketing plans or other sensitive business
information, including all materials containing said information, which are
supplied by the Sunhawk to Engraver or developed by Engraver in the course of
conversion is the confidential information ("Confidential Information") of
Sunhawk.
6.2 Restrictions on Use. Engraver agrees that except as authorized in
writing by EM: (i) Engraver will preserve and protect the confidentiality of all
Confidential Information; (ii) Engraver will not disclose to any third party,
the existence, source, content or substance of the Confidential Information or
make copies of Confidential Information; (iii) Engraver will not deliver
Confidential Information to any third party, or permit the Confidential
Information to be removed from Engraver's premises; (iv) Engraver
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will not use Confidential Information in any way other than to develop the Final
Files as provided in this Agreement; (v) Engraver will not disclose, use or copy
any third party information or materials received in confidence by Engraver for
purposes of work performed under this Agreement; and (vi) Engraver shall require
that each of its employees who work on or have access to the materials which are
the subject of this Agreement sign a suitable confidentiality and
work-for-hire/assignment agreement and be advised of the confidentiality and
other applicable provisions of this Agreement.
6.3 Return of Source Materials. Upon EM's acceptance of a Final File for
a Music Title, Engraver shall provide EM with all copies and originals of the
Source File, Source Materials, Working Materials and Final File for the Music
Title. Not later than seven (7) days after the termination of this Agreement for
any reason, or if sooner requested by EM, Engraver will return to EM all
originals and copies of the Proprietary Materials and Confidential Information,
as well as any other materials provided to Engraver, or created by Engraver
under this Agreement.
6.4 Third Party Confidential Information. Engraver will not disclose to
EM or induce EM to use any confidential information or trade secrets belonging
to any third party.
SECTION 7
WARRANTIES, COVENANTS AND INDEMNIFICATION
7.1 Warranties and Covenants of Engraver. Engraver represents, warrants
and covenants to EM the following:
(a) Engraver has the full power to enter into this Agreement and perform
the services provided for herein, and that such ability is not limited or
restricted by any agreements or understandings between Engraver and other
persons or companies;
(b) Any information or materials developed for, or any advice provided
to EM, shall not rely or in any way be based upon confidential or proprietary
information or trade secrets obtained or derived by Engraver from sources other
than EM.
(c) The conversion and other work performed by Engraver under this
Agreement shall be in compliance with the Specifications.
7.2 Engraver's Indemnity. Engraver agrees to indemnify, hold harmless
and defend EM from all claims, defense costs (including reasonable attorneys'
fees), judgments and other expenses arising out of or on account of the
conversion work which it performs under this Agreement, including without
limitation claims of the breach of any covenant or warranty set forth in Section
7.1 above.
7.3 Conditions to Engraver's Indemnity. Engraver's obligation to
indemnify is conditioned on EM's notifying Engraver promptly of any claim as to
which indemnification will be sought and providing Engraver reasonable
cooperation in the defense and settlement thereof.
7.4 EM's Indemnification. EM agrees to indemnify, hold harmless and
defend Engraver from all claims, defense costs (including reasonable attorneys'
fees), judgments and other expenses arising out of the breach of the following
Covenants and Warranties:
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(a) EM possesses full power and authority to enter into this Agreement
and to fulfill its obligations hereunder.
(b) The performance of the terms of this Agreement and of EM's
obligations hereunder shall not breach any separate agreement by which EM is
bound.
7.5 Conditions to EM's Indemnity. EM's obligation to indemnify is
conditioned on Engraver's notifying EM promptly of any claim as to which
indemnification will be sought and providing EM reasonable cooperation in the
defense and settlement thereof.
SECTION 8
CONVERSION FEES
8.1 Payments. EM shall pay Engraver according to the payment schedule
set forth in Schedule "B" upon EM's acceptance of each Final File. "Acceptance"
shall mean the decision, made in EM's sole discretion, that the Final File
conforms to the Specifications. Payment will be based on the number of Pages
accepted by EM. No conversion fee shall be payable on Pages which are
conversions of title pages. Since a Page may be larger or smaller than the
original printed Music Title page, fees are payable on the number of Pages
accepted, and not on the number of pages in the original printed Music Title.
8.2 Compliance with Laws. Engraver will comply with all applicable laws
and regulations in performing the services under this Agreement. EM shall have
the right to make deductions and withholdings from amounts payable to Engraver
if required to do so by any governmental agency. Engraver shall be responsible
for any taxes, duties or other fees or costs associated with the performance of
its obligations under this Agreement.
SECTION 9
TERMINATION
9.1 Termination for Non-Performance or Delay. In the event Engraver
materially breaches this Agreement and fails to cure said breach within seven
(7) days of notice of the material breach, EM shall have the right to terminate
this Agreement effective as of the end of the seven (7) day notice period. EM
will have the right, in addition to all of its other rights, to require that
Engraver deliver to EM all of Engraver's work in progress, including all
originals and copies thereof, as well as any other materials provided to
Engraver, or created by Engraver under this Agreement. EM shall have the right
to terminate this Agreement without cause upon sixty (60) days written notice.
Payment of any Delivery Schedule milestones under Schedule "B" which have been
met shall be deemed payment in full for all obligations of EM under this
Agreement, including full payment for all Working Materials, Final Files and all
other materials and work relating to the portion of this Agreement which has
been completed as of the time of termination.
SECTION 10
GOVERNING LAW; JURISDICTION AND VENUE
Governing Law; Venue. Governing Law; Venue. This Agreement will be
governed by the laws of the United States and the State of Washington, excluding
the application of its conflicts of law rules. Engraver consents to the personal
and exclusive jurisdiction and venue of the state and federal courts located in
Seattle, Washington. Engraver also consents that EM may at its election submit
any dispute
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arising from this Agreement to binding Arbitration under the rules of the
American Arbitration Society. Said Arbitration shall be held in Seattle,
Washington. Engraver acknowledges that EM shall be entitled to injunctive or
other equitable relief for the breach or infringement, or threatened breach or
infringement of its proprietary rights from the court or arbitrator.
SECTION 11
MISCELLANEOUS PROVISIONS
11.1 Notices. For purposes of all notices required or permitted to be
given hereunder, the addresses of the parties hereto shall be as indicated
below. All notices shall be in writing and shall be deemed to have been duly
given if sent by facsimile, the receipt of which is confirmed by return
facsimile or email, or sent by first class registered or certified mail or
equivalent, return receipt requested, addressed to the Parties at their
addresses set forth below:
If to Engraver: Avtograf
CJSC Printing Office
Avtograf
Xxxxxxxxx Xx. 0
Xxxxxxxxxxx, Xxxxxx 000000
If to EM: Xxxxx-XxXxxxxx LLC
000 00xx Xxxxxx Xxxx,
Xxxxxxx Xxxxxxxxxx 00000 XXX
Attn: Xxxx XxXxxxxx
11.2 Entire Agreement. Except for the Combined Solero Editor and Viewer
Agreement, this Agreement, including the attached Schedules which are
incorporated herein by reference as though fully set out, contains the entire
understanding and agreement of the Parties with respect to the subject matter
contained herein, supersedes all prior oral or written understandings and
agreements relating thereto except as expressly otherwise provided by this
Agreement, and may not be altered, modified or waived in whole or in part,
except in writing, signed by duly authorized representatives of the Parties.
11.3 Force Majeure. Neither Party shall be held responsible for damages
caused by any delay or default due to any contingency beyond its control
preventing or interfering with performance hereunder.
11.4 Severability. If any provision of this Agreement shall be held by a
court of competent jurisdiction (or arbitrator) to be contrary to any law, the
remaining provisions shall remain in full force and effect as if said provision
never existed.
11.5 Contract Assignment. This Agreement is personal to Engraver.
Engraver may not sell, transfer, sublicense, hypothecate or assign its rights
and duties under this Agreement without the written consent of EM. This
Agreement shall inure to the benefit of EM, its successors and assigns. EM may
transfer its rights to the Proprietary Materials to any other persons or legal
entities without Engraver's consent.
11.6 Waiver and Amendments. No waiver, amendment, or modification of any
provision of this Agreement shall be effective unless consented to by both
Parties in writing. No failure or delay by either
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Party in exercising any rights, power, or remedy under this Agreement shall
operate as a waiver of any such right, power, or remedy.
11.7 Agency. The Parties are separate and independent legal entities.
Engraver is performing services for EM as an independent contractor. Nothing
contained in this Agreement shall be deemed to constitute either Engraver or EM
an agent, representative, partner, joint venturer or employee of the other party
for any purpose. Neither Party has the authority to bind the other or to incur
any liability on behalf of the other, nor to direct the daily work activities of
the other. EM shall however have the right to provide support in the use of its
Editor software, suggestions on procedures for creating Final Files, and
comments and corrections on the Final Files which are submitted for approval.
11.8 Limitation on Liability; Remedies. Except as provided in Section 7
above, and except in the case of the infringement or violations of copyright,
trade secret, trademark or any other intellectual property rights, neither party
shall be liable to the other party for any incidental, consequential, special,
or punitive damages or lost profits of any kind or nature, arising from the
breach or termination of this Agreement, even if either party has warned or been
warned of the possibility of any such loss or damage.
11.9 This Agreement is executed in Russian and English in identical
duplicates of equal legal force except in the case of the conflict of Russian
and English version, in which case the English version controls. Each party has
one English and one Russian original of this Agreement.
IN WITNESS WHEREOF, this Agreement is executed as of the Effective Date set
forth above.
Avtograf Xxxxx-XxXxxxxx, LLC
By: By
-------------------------------- --------------------------------
-------------------------------- --------------------------------
Its: Its:
----------------------------- -----------------------------
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SCHEDULE A
SPECIFICATIONS
1. The Final Files shall conform to the Sunhawk Style Manual and any revisions
or updates which are issued during the term of this Agreement.
2. The Final Files will be of a quality consistent with that prepared and
published by Sunhawk.
3. The Final Files shall conform to the quality of sample files (for both a
visual and audio quality) and printed music provided by Sunhawk, including the
"Good and Bad" files, "Samples" and "Showcase Pages" located at
xxxxx://xxxxx.xxxxxxx.xxx/Xxxxx/xxxxxxxxx.
4. The Final File shall conform to any style or corrections memos which may be
issued by Sunhawk.
5. For each Final File submitted, Engraver will provide EM with the name of the
Engraver employee who did the final quality review ("slotted") of the Final
File.
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SCHEDULE B
DELIVERY AND PAYMENT SCHEDULE
Delivery Schedule
1,500 pages during the month of November 1998.
2,500 pages during the month of December 1998
5,000 pages per month beginning January 1, 1999 and ending December 31, 2004
Payment upon Acceptance
$10.00 per Page accepted until March 31, 1999.
$ 7.00 per Page from April 1, 1999 until December 31, 2004.
The price for "scans," guitar-tab, lyric sheets and other forms of music other
than full score shall be separately negotiated.
(The parties acknowledge that in addition to the Pages listed above, Engraver
has delivered, and EM has accepted 1,294 pages.)
EM shall pay the salary of one person for the two weeks during onsite training.
The cost of additional onsite training will be borne by Engraver at a fee to be
separately negotiated. Engraver shall be responsible for all travel,
accommodations, salaries (other than the two-week onsite training) and other
expenses associated with onsite training.
Non-competing--help to convert. Not make money on the third party exploitation.
Help them to convert into other formats.
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