DIGITAL MUSIC AND VIDEO DISTRIBUTION AGREEMENT
This
Digital Music and Video Distribution Agreement (the
“Agreement”), together with the Standard Terms and Conditions
attached hereto and incorporated by reference, is entered into as of the ___
day
of August, 2007 (the “Effective Date”) by and between Mohen,
Inc. d/b/a SpiralFrog, a Delaware corporation with its principal place of
business at 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, (referred to in this
Agreement as “SpiralFrog”) and the distributing party listed on
the attached signature page, (referred to in this Agreement as
“IODA”). Unless otherwise indicated, all capitalized
terms used in this Agreement have the meaning set forth in the Standard Terms
and Conditions.
RECITALS
WHEREAS,
SpiralFrog desires to offer advertising-supported digital music, digital video
and lyric content to Users (as defined herein) via the Service (as described
in
Exhibit “A”) in the formats including, but not limited to: (i) Limited Music
Downloads, (ii) Limited Music Video Downloads, (iii) Limited Non-Music Video
Downloads, (iv) Lyric Displays, (v) Music Streams, (vi) Music Video Streams
and
(vii) Non-Music Video Streams (as such terms are defined herein);
WHEREAS,
IODA owns and controls certain rights in and to digital music, digital video
and
Related Content (as defined herein) subject to this Agreement; and
WHEREAS,
IODA has full power and authority to grant to SpiralFrog the right and privilege
to use the Distributed Content (as defined herein) in connection with the
Service;
NOW,
THEREFORE, in consideration of the mutual covenants herein contained, the
parties hereto agree as follows:
1. Grant
of Rights.
(a) Subject
to the terms and conditions of this Agreement, IODA hereby grants the following
limited non-exclusive rights in and to the Distributed Content to SpiralFrog,
during the Term and within the Territory, without the right to transfer or
sub-license any rights granted herein, except as specifically provided
herein:
(i) the
right
to reproduce and distribute copies of, to publicly perform and otherwise exploit
the Distributed Content solely in connection with the Service;
(ii) the
right
to reproduce the Distributed Content in connection with DRM
encoding;
(iii) the
right
to reproduce and display album artwork in connection with promotion of the
Service;
(iv) the
right
to collect any and all income derived from the use of the Distributed Content
in
connection with the Service;
(v) the
right
to store, host and prepare backup copies of the Distributed Content solely
for
the purposes of exercising the specific rights granted hereunder.
(b) IODA
has
no objection to SpiralFrog's use of reputable third-party metadata (i.e., data
from All Music Guide, Gracenote, Muze and Pollstar) in conjunction with the
Distributed Content, but makes no grant or warranty in such regard.
1A. Delivery
of Content.
IODA
shall deliver the Distributed Content to SpiralFrog in accordance with the
terms
and conditions of this Agreement, and as may be provided in the encoding and
delivery terms contained in Exhibit D (“Encoding & Delivery
Agreement”). SpiralFrog acknowledges that IODA is comprised
of Represented Labels, each of which shall have the individual ability to
decline to participate in the Service after being notified of the material
terms
hereof. If a particular Represented Label so declines to participate
by notifying IODA within IODA’s standard fourteen (14) day opt-out period
(“Opt-Out Period”), the terms of this Agreement shall not be
applicable to said Represented Label and its recordings shall not be considered
part of the Distributed Content subject to this Agreement and shall not be
offered by IODA for distribution hereunder, unless otherwise mutually agreed
to
by IODA and SpiralFrog. Upon expiration of the Opt-Out Period, all Distributed
Content and Related Content delivered to SpiralFrog by IODA for use in the
connection with the Service shall remain subject to the non-exclusive rights
granted to SpiralFrog under this Agreement until the end of the Term. IODA
agrees to make good faith efforts to notify Represented Labels of this Agreement
within five (5) business days of the Effective Date. Notwithstanding anything
to
the contrary in this Agreement and/or the Encoding & Delivery Agreement,
prior to the delivery by IODA of any A/V Master Music Video Recordings or A/V
Master Non-Music Video Recordings, IODA and SpiralFrog will negotiate in good
faith mutually agreeable encoding and/or delivery terms for such A/V Master
Music Video Recordings and/or A/V Master Non-Music Video
Recordings.
2. Restrictions
on Grant of Rights.
(a) Any
and
all rights in and to the Distributed Content not expressly granted hereunder
are
reserved by IODA, including, but not limited to:
(i) rights
to
karaoke or synchronization with video games;
(ii) merchandising
rights;
(iii) rights
to
derivative works;
(iv) rights
to
use, exploit, or permit the use of exploitation of the Distributed Content
as a
ringtone, ringback tone, or other so-called telecommunication personalization
products, although IODA expressly acknowledges that a User may be able to
transfer a Master Recording from a full-track folder to a ringtone folder on
a
cellular telephone if that cellular telephone’s operating system or software
fails to restrict such a transfer;
(v) rights
to
distribute physical copies of Distributed Content (e.g., CDs or DVDs), apart
from any physical copies of Distributed Content which are sold separately on
the
Service by third parties (i.e., those third parties who represent that IODA
has
authorized in writing the exercise of such rights), including a hyperlink
through which Users may purchase physical copies of Distributed Content (if
available).
(b) IODA
hereby acknowledges that the User’s experience of Distributed Content occurs in
connection with third-party advertising; however, SpiralFrog shall
not:
(i) use
any
Distributed Content in a manner that suggests IODA, Represented Labels or
artists featured in any specific Distributed Content is associated with or
endorses any advertiser, product or service; notwithstanding the preceding,
nothing contained herein shall prohibit SpiralFrog from displaying
advertisements correlated with Distributed Content or artists featured on
Distributed Content when the association is based on some form of data analysis,
established research, and/or advertising information provided by a third-party
service;
(ii) display
advertisements from any entity whose primary business relates to, or which
promotes and/or constitutes the unauthorized distribution of copyrighted
material, or any advertisement that promotes tobacco, firearms, hate speech,
illegal drugs, pornographically obscene materials, or alcohol, except that
SpiralFrog may display advertisements relating to alcohol to Users above the
applicable legal drinking age.
(c) For
avoidance of doubt, ownership and control of any copyrights and/or trademarks
in
the Distributed Content is retained solely by IODA or Represented Labels, and
neither SpiralFrog nor any User or other third party shall obtain any ownership
rights in any work derived from or that makes use of the Distributed
Content.
(d) SpiralFrog
agrees to use commercially reasonable efforts to monitor new content ingested
into its catalog to reasonably determine whether a third party
(“Duplicate Distributor”) purports to distribute any
Distributed Content to SpiralFrog (“Duplicate
Distribution”). If SpiralFrog or IODA discovers a Duplicate
Distribution, SpiralFrog will (i) promptly notify the Duplicate Distributor
that
the Distributed Content concerned has already been licensed from IODA and that
SpiralFrog intends to account to IODA, and not the Duplicate Distributor, with
respect to the Distributed Content concerned, unless the Duplicate Distributor
can provide evidence refuting IODA’s exclusive right to distribute the
Distributed Content to SpiralFrog, and (ii) subject to any confidentiality
requirements SpiralFrog may be subject to in a third-party agreement, notify
IODA of the name and contact information of the Duplicate IODA so that IODA
may
take action as it deems appropriate. SpiralFrog will make
commercially reasonable efforts to cooperate with IODA to resolve matters
relating to such Duplicate Distributor.
3. Compensation.
In
consideration of the rights granted herein, SpiralFrog shall pay IODA the
following amounts, which will be calculated on a monthly basis:
(a) Music
Royalty. With respect solely to SpiralFrog’s exploitation of
Limited Music Downloads and Music Streams, SpiralFrog shall pay to IODA a
royalty equal to fifty percent (50%) of Gross Music Revenue multiplied by IODA’s
Music Royalty Share.
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) Music
Video Royalty. With respect solely to SpiralFrog’s exploitation
of Limited Music Video Downloads and Music Video Streams, SpiralFrog shall
pay
to IODA a royalty equal to fifty percent (50%) of Gross Music Video Revenue
multiplied by IODA’s Music Video Royalty Share.
The
“Music Video Royalty Share” shall equal a fraction, the
numerator of which shall be the sum of the number of Music Video Plays and
Music
Video Streams, and the denominator of which shall be the sum of the number
of
Music Video Plays, Music Video Streams, Service-wide Music Video Plays and
Service-wide Music Video Streams.
(c) Non-Music
Video Royalty. With respect solely to SpiralFrog’s exploitation
of Limited Non-Music Video Downloads and Non-Music Video Streams, SpiralFrog
shall pay to IODA a royalty equal to fifty percent (50%) of Gross Non-Music
Video Revenue multiplied by IODA’s Non-Music Video Royalty Share.
The
“Non-Music Video Royalty Share” shall equal a fraction, the
numerator of which shall be the sum of the number of Non-Music Video Plays
and
Non-Music Video Streams, and the denominator of which shall be the sum of the
number of Non-Music Video Plays, Non-Music Video Streams, Service-wide Non-Music
Video Plays and Service-wide Non-Music Video Streams.
(d) Lyric
Royalty Exclusion. All revenue derived from Music Lyrics shall be
specifically excluded from IODA’s compensation, including, but not limited to,
Music Royalty, Music Video Royalty, and Non-Music Video Royalty.
(e) Unsold
Advertising Inventory. SpiralFrog shall provide to IODA, and IODA
shall be entitled to use, a pro-rata share of twenty-five percent (25%) of
SpiralFrog’s unsold advertising inventory, which IODA may use to promote
Distributed Content owned and/or controlled by IODA. IODA’s pro-rata
share of unsold advertising inventory shall be determined by using the fraction
used in calculating IODA’s Music Royalty Share multiplied by twenty-five percent
(25%) of the unsold advertising inventory available based upon the previous
quarter’s royalty calculation (or in the case of the Service’s first quarter
after launch, a commercially reasonable estimate of the same). IODA’s
share of unsold advertising inventory is exclusively provided to IODA for use
by
IODA and may not be sold, exchanged, transferred, bartered or donated to any
other party (including IODA’s Represented Labels, artists, affiliates, partners
or associated entities) and may not be utilized for any purpose other than
to
promote Distributed Content owned and/or controlled by IODA. SpiralFrog reserves
the right to reject any advertising, which it, in good faith, considers (i)
offensive to its audience or (ii) in violation of this Section
3(e).
(f) Publishing
Fees Not Included. The rights granted by IODA to SpiralFrog under
this Agreement do not include any rights to perform, reproduce or otherwise
use
the musical compositions embodied in the Distributed
Content. SpiralFrog 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. IODA will make reasonable commercial efforts on an ongoing
basis during the term of this Agreement to supply SpiralFrog with all publishing
information for the Distributed Content that IODA has in its possession, custody
or control for the Distributed Content.
(g) SpiralFrog
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
SpiralFrog’s control, and that such interruptions and other interference will
affect the royalty calculations set forth above.
(h) Favored
Terms. SpiralFrog represents, warrants and covenants that as long
as this Agreement is in effect, IODA shall receive no less favorable
royalty rates, including, without limitation, “xxxxx rate” floors, Music
Royalty, Video Royalty, and Non-Music Video Royalty, than provided to any other
provider of sound recordings and/or audio visual recordings on the Service,
including, without limitation, the corporation commonly referred to as
“Universal Music Group.” If SpiralFrog enters an agreement that includes more
favorable royalty rates than granted to IODA herein, including, without
limitation, a “xxxxx rate” floor, SpiralFrog will notify IODA within thirty (30)
days of entering into any such agreement and IODA thereafter will have thirty
(30) days within which to accept or reject any such more favorable royalty
rates. SpiralFrog will not enter into multiple agreements with the
same contracting party so as to avoid its obligations hereunder.
4. Term.
The
term
of this Agreement shall commence on the Effective Date and remain in effect
until the earlier of (i) one year from the date of SpiralFrog’s official launch
in the USA or (ii) October 31, 2008 ( the “Initial Term”), and
shall automatically renew on a quarterly basis following expiration of the
Initial Term unless otherwise terminated by either party on thirty (30) days’
written notice to the other party to this effect (collectively, the Initial
Term
and any renewal terms, the “Term”).
5. Territory.
The
territory of rights granted herein shall be the universe, with the exception
of
any territory restrictions which are noted in the metadata accompanying the
Distributed Content or of which IODA otherwise notifies SpiralFrog 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
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By:
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________________________________
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_______________________
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name:
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Date
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Title:
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INDEPENDENT
ONLINE DISTRIBUTION ALLIANCE, INC.
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By:
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________________________________
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_______________________
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Print
name:
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Date
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name:
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Date
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DIGITAL
MUSIC AND VIDEO LICENSE AGREEMENT/SOUND RECORDINGS
STANDARD
TERMS AND CONDITIONS
1. Definitions.
“A/V
Master Music Video Recording” shall mean an audio/visual work
distributed hereunder that embodies a Master Recording in synchronization with
visual images.
“A/V
Master Non-Music Video Recording” shall mean an audio/visual work,
including without limitation, a television program, television clip, motion
picture, trailer, video game, or other audiovisual content (whether or not
including musical content) other than a music video licensed hereunder that
embodies a Master Recording.
“Confidential
Information” shall mean (a) information relating to the business
affairs, employees, providers, 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 be confidential or
proprietary.
“Covered
Device” shall mean each of (a) a Personal Computer that supports DRM
and is able to receive Distributed Content via a communications network or
(b) a
Portable Digital Music Device that supports DRM and is able to receive
Distributed Content.
“Distributed
Content” shall mean each Master Recording, A/V Master Music Video
Recording, A/V Master Non-Music Video Recording, and/or Related Content
delivered by IODA to SpiralFrog under the terms of the Agreement.
“DRM”
shall mean digital rights management technology that imposes controls over
the
use of Distributed Content that is no less secure than that prevailing in the
industry, including the Security Systems set forth in this Agreement and that
is
no less protective than the security features provided for any other sound
recording, artwork or other content on its Service.
“Gross
Lyric Revenue” means all Gross Advertising Revenue generated in
connection with the Music Lyrics on the Service. For the avoidance of doubt,
Gross Lyric Revenue shall not include Gross Music Revenue, Gross Music Video
Revenue, or Gross Non-Music Video Revenue.
“Gross
Music Revenue” means all Gross Advertising Revenue generated in
connection with the Master Recordings on the Service and Gross Advertising
Revenue not generated in connection with A/V Master Music Video Recordings,
A/V
Master Non-Music Video Recordings or Music Lyrics on the Service. For the
avoidance of doubt, Gross Music Revenue shall not include Gross Lyric Revenue,
Gross Music Video Revenue, or Gross Non-Music Video Revenue.
“Gross
Music Video Revenue” means all Gross Advertising Revenue generated in
connection with the A/V Master Music Video Recordings on the Service. For the
avoidance of doubt, Gross Music Video Revenue shall not include Gross Lyric
Revenue, Gross Music Revenue, or Gross Non-Music Video Revenue.
“Gross
Non-Music Video Revenue” means all Gross Advertising Revenue generated
in connection with the A/V Master Non-Music Video Recordings on the Service.
For
the avoidance of doubt, Gross Non-Music Video Revenue shall not include Gross
Lyric Revenue, Gross Music Revenue, or Gross Music Video Revenue.
“Gross
Advertising Revenue” shall mean all non-returnable monies actually
received or credited in connection with the Service during the Term, including:
(i) fees paid directly or indirectly to the SpiralFrog in connection with the
Service, including any access charges, per-stream charges, online or other
connection charges, transaction charges, commissions subscription fees or other
consideration paid to SpiralFrog directly or indirectly by Users, internet
service providers, on-line franchises, companies or other entities (to the
extent permitted by this Agreement) in connection with the Service; (ii)
revenues from sales of advertising, sponsorships and promotions in connection
with the Service, including, without limitation, streaming pre-roll ads,
streaming post-roll ads, multi-video ad units, dynamic ad insertions and gateway
advertisements; (iii) referral fees, “bounties,” affiliate fees and like fees
generated through the Service and ecommerce revenue from sales of products
and
services offered as part of, or through, the Service; and (iv) access to, use
of, or upgrades to any proprietary software used for access to or use of, the
Service, or to download products, services or content (to the extent permitted
by this Agreement and applicable law). Notwithstanding the foregoing, revenues
earned from the sale of Distributed Content in a physical “finished goods”
configuration (e.g., CDs, DVDs, vinyl) within the Service shall be specifically
excluded from the definition of Gross Advertising Revenue, Gross Non-Music
Video
Revenue, Gross Music Revenue, Gross Music Video Revenue and Gross Lyric Revenue.
For purposes of determining any non-cash component of Gross Advertising Revenue,
such non-cash consideration will be accounted for based on the fair market
value
of any goods, services or other real, personal, tangible or intangible property
received (except as otherwise determined consistent with Generally Accepted
Accounting Principals).
“Limited
Music Download” shall mean an encrypted 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
SpiralFrog and is only available to such User through such Covered Device for
a
limited period of time. Each Limited Music Download times out within
two (2) months from the date on which the User first downloaded the Master
Recording, or 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 (“Time-Out Period”). Notwithstanding the foregoing,
in the event any Other Label is granted a Time Out Period that is shorter than
the period described in the previous sentence, then SpiralFrog agrees to provide
such shorter period to this Agreement.
“Limited
Music Video Download” shall mean an encrypted digital transmission of a
time-limited or other use-limited download of an A/V Master Music Video
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 SpiralFrog and is only available to such User through such
Covered Device for a limited period of time. Each Limited Music Video
Download times out within two (2) months from the date on which the User first
downloaded the A/V Master Music Video Recording, or 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 (“Time-Out Period”).
Notwithstanding the foregoing, in the event any Other Label is granted a
Time-Out Period that is shorter than the period described in the previous
sentence, then SpiralFrog agrees to provide such shorter period to this
Agreement.
“Limited
Non-Music Video Download” shall mean an encrypted digital transmission
of a time-limited or other use-limited download of an A/V Master Non-Music
Video
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 SpiralFrog and is only available to such User through such
Covered Device for a limited period of time. Each Limited Non-Music
Video Download times out within two (2) months from the date on which the User
first downloaded the A/V Master Non-Music Video Recording, or 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 (“Time-Out
Period”). Notwithstanding the foregoing, in the event any Other Label
is granted a Time-Out Period that is shorter than the period described in the
previous sentence, then SpiralFrog agrees to provide such shorter period to
this
Agreement.
“Lyric
Displays” shall mean an encrypted digital transmission from Secured
Servers via the Service that allows a User to receive and view Music Lyrics
associated with a particular IODA-controlled Master Recording upon request
at a
time chosen by the User, with the print, copy, cut and paste functionality
disabled.
“Master
Recording” shall mean an audio-only master sound
recording.
“Music
Lyrics” shall mean the words of a particular song.
“Music
Play” shall mean each instance whereby a User causes a IODA-controlled
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
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.
“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
IODA-controlled Master Recording upon request at a time chosen by the User
using
streaming technology 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.
“Music
Video Play” shall mean each instance whereby a User causes an
IODA-controlled A/V Master Music Video 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 Music Video Download.
“Music
Video Royalty Share” shall equal a fraction, the numerator of which
shall be the sum of the number of Music Video Plays and Music Video Streams,
and
the denominator of which shall be the sum of the number of Music Video Plays,
Music Video Streams, Service-wide Music Video Plays and Service-wide Music
Video
Streams.
“Music
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 IODA-controlled A/V Music Video Master Recording upon request at
a
time chosen by the User using streaming technology through the User’s Covered
Device, which transmission will (a) not result in a substantially complete
portable reproduction of such A/V Master Music Video 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 Music
Video Recording.
“Non-Music
Video Play” shall mean each instance whereby a User causes an
IODA-controlled A/V Master Non-Music Video 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 Non-Music Video Download.
“Non-Music
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 IODA-controlled A/V Master Non-Music Video Recordings upon request
at
a time chosen by the User using streaming technology through the User’s Covered
Device, which transmission will (a) not result in a substantially complete
portable reproduction of such A/V Master Non-Music Video Recordings (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
Non-Music Video Recording.
“Non-Music
Video Royalty Share” shall equal a fraction, the numerator of which
shall be the sum of the number of Non-Music Video Plays and Non-Music Video
Streams, and the denominator of which shall be the sum of the number of
Non-Music Video Plays, Non-Music Video Streams, Service-wide Non-Music Video
Plays and Service-wide Non-Music Video Streams.
“Person”
shall mean 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 Protocol (IP)-enabled desktop or
notebook computer.
“Portable
Digital Music Device” shall mean a portable device (including, but not
limited to, mobile-telephone and other mobile devices that may operate on a
wireless communications network) that is used for the storage and play/playback
of digital audio/video files (i.e., files encoded in MP3, AAC, WMA, WMV or
similar format).
“Related
Content” shall mean IODA-provided identifying material with respect to
the Master Recordings, A/V Master Music Video Recordings, and A/V Master
Non-Music Video Recordings licensed hereunder, including, but not limited to,
trademarks, album artwork, artists’ names, biographies, likenesses, metadata and
ISRC codes.
“Represented
Labels” shall mean individual artists and/or record labels for whose
catalog IODA may grant digital distribution rights, including, but not limited
to, those granted under this Agreement, and further including those persons
for
whose catalogs IODA 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 SpiralFrog or
on SpiralFrog’s behalf and protected by means of (a) reasonable 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 described in Exhibit A, which offers Users Limited
Music Downloads, Music Streams, Limited Music Video Downloads, Music Video
Streams, Limited Non-Music Video Downloads, Non-Music Video Streams, and/or
Lyric Displays 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
Lyric Displays” shall mean the total number of encrypted digital
transmissions from Secured Servers via the Service of Music Lyrics associated
with Master Recordings of third parties contributing Music Lyrics to the Service
that allow Users to receive and view those particular Music Lyrics upon request
at a time chosen by the User, with the print, copy, cut and paste functionality
disabled.
“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 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
Music Video Plays” are the total number of instances where Users cause
A/V Master Music Video Recordings of third parties contributing A/V Master
Music
Video 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 Video Streams” shall mean the total number of encrypted digital
transmissions from Secured Servers via the Service of A/V Master Music Video
Recordings of third parties contributing A/V Master Music Video Recordings
to
the Service that allow Users to receive, view, and listen to those particular
A/V Master Music Video Recordings upon request at a time chosen by the User
using streaming technology through the User’s Covered Device, which
transmissions will (a) not result in a substantially complete portable
reproduction of such A/V Master Music Video 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 Music
Video Recording.
“Service-wide
Non-Music Video Plays” are the total number of instances where Users
cause A/V Master Non-Music Video Recordings of third parties contributing A/V
Master Non-Music Video 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
Non-Music Video Streams” shall mean the total number of encrypted
digital transmissions from Secured Servers via the Service of A/V Master
Non-Music Video Recordings of third parties contributing A/V Master Non-Music
Video Recordings to the Service that allow Users to receive, view, and listen
to
those particular A/V Master Non-Music Video Recordings upon request at a time
chosen by the User using streaming technology through the User’s Covered Device,
which transmissions will (a) not result in a substantially complete portable
reproduction of such A/V Master Non-Music Video 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 Non-Music
Video Recording.
“Territory”
shall mean the universe, with the exception of any excluded territories in
the
metadata accompanying the Distributed Content or of which IODA has otherwise
notified SpiralFrog 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 SpiralFrog’s user agreement, and who is authorized by SpiralFrog to access
Limited Music Downloads, Music Streams, Limited Music Video
Downloads, Music Video Streams, Limited Non-Music Video Downloads,
Non-Music Video Streams, Lyric Displays and/or any individual who uses the
Service solely to access 30-second Music Streams, 30-second Music Video Streams,
or 30-second Non-Music Video Streams via the Service solely for personal,
non-commercial use.
2. SpiralFrog
Service Obligations.
(a) Service
Operation. SpiralFrog 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. SpiralFrog shall require each User to enter into a
user agreement which prohibits further distribution of the Licensed
Content.
(c) Limitations
on User Access. SpiralFrog’s user agreement shall state that each
User shall only be authorized to access Limited Music Downloads, Music Streams,
Limited Music Video Downloads, Music Video Streams, Limited Non-Music Video
Downloads, Non-Music Video Streams and Lyric Displays through the Service on,
and for each User Covered Device shall only include, at any one time, up to
one
(1) Personal Computer and up to two (2) Portable Digital Music
Devices.
(d) Buy
Link. Upon a User’s selection of Distributed Content, SpiralFrog
will make commercially reasonable efforts to provide a hyperlink, through which
the User can purchase permanent copies (in electronic and/or physical format)
of
the Distributed Content (with respect to which IODA is compensated under
third-party financial arrangements) to the extent readily available through
retail channels made available on the Service.
(e) Metadata. IODA
will provide SpiralFrog with all metadata associated with the Distributed
Content. SpiralFrog shall use commercially reasonable efforts to use
metadata delivered by IODA to SpiralFrog hereunder. IODA shall
deliver such metadata to SpiralFrog 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, IODA shall retain all right, title and interest in and to any
IODA-provided metadata delivered hereunder.
(f) Security
Compliance.
(i) In
connection with any use of Distributed Content, SpiralFrog 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 Distributed
Content;
(B) encrypt
Distributed 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.
(ii) SpiralFrog
shall protect Distributed Content with DRM using then-current industry standards
security technology and no less protective than the security features provided
for any other similar content on its Service. If necessary, SpiralFrog shall
upgrade its equipment and software, during the Term, at its own cost, to the
extent required to comply with the terms of this Section 2(f)(ii). If either
IODA or SpiralFrog discovers that any security measures enacted by SpiralFrog
on
the Service have been breached (a "Security Incident") and
SpiralFrog either (i) has actual knowledge of such breach or (ii) receives
notice of such breach from IODA that can be verified, then SpiralFrog will
be
required to temporarily remove the Distributed Content involved in the Security
Incident promptly (but in no event later than three (3) business days) after
acquiring such actual knowledge or notice. Notwithstanding the
foregoing, in the event SpiralFrog reasonably determines that the relevant
security measure can be repaired, updated or improved such that similar Security
Incidents are unlikely to occur in the future and such repair, update or
improvement can be made, and is in fact made, then SpiralFrog will not be
required to temporarily remove the Distributed Content involved in the Security
Incident.
3. Accounting.
(a) Payment
Process. SpiralFrog shall pay royalties due to IODA hereunder
within thirty (30) days after the end of each monthly accounting period (or
partial period in the event of an early termination or expiration before the
calendar close of such accounting period) by wire or ACH banking transfer,
provided IODA provides such bank account and related information to SpiralFrog
in writing within a reasonable period of time.
(b) Accounting
Statements. In connection with each royalty payment hereunder,
SpiralFrog shall provide IODA with an electronic statement
(“Statement”) in conformance with the “IODA
Reporting Specifications” attached as Exhibit G and hereby incorporated
by reference showing the total number of Music Plays, Music Streams,
Music Video Plays, Music Video Streams, Non-Music Video Plays and Non-Music
Video Streams identified by each individual Master Recording, A/V Master
Recording, A/V Non-Music Video Recording including the ISRCs, UPCs, IODA
provided track IDs, IODA provided release IDs for the relevant Master
Recordings, A/V Master Music Video Recordings and A/V Master Non-Music Video
Recordings distributed to Users via the Service as (i) Limited Music Downloads,
(ii) Limited Music Video Downloads, (iii) Limited Non-Music Video Downloads,
(iv) Music Streams, (v) Music Video Streams and/or (vi) Non-Music Video
Streams. Further, SpiralFrog will furnish monthly transactional data
information showing the track codes and release codes assigned by IODA, the
UPC
codes, ISRC codes, the ID codes provided by SpiralFrog, date of transaction
for
the Distributed Content. SpiralFrog agrees to make reasonable efforts to offer
Distributed Content no later than fifteen (15) days after such Distributed
Content is delivered to SpiralFrog.
(c) Audit. During
the Term and for two (2) years thereafter, IODA shall be entitled, once during
every calendar year, upon at least thirty (30) days’ prior written notice, to
examine the books and records of SpiralFrog to determine the accuracy of
SpiralFrog royalty statements (a “Royalty
Examination”). Such Royalty Examination shall be conducted
solely at IODA’s expense by a certified public accountant in good
standing. Such Royalty Examination shall take place at SpiralFrog’s
place of business during normal business hours, in a manner designed to be
as
non-disruptive to SpiralFrog’s business as possible. IODA shall not
conduct an audit more frequently than once every twelve (12)
months. Should such audit reveal an underpayment of ten percent (10%)
or greater, then, in addition to immediate payment of such underpayment,
SpiralFrog shall reimburse IODA the reasonable costs of conducting such
audit.
(d) All
statements rendered by SpiralFrog shall be incontestable three (3) years after
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, IODA waives
any action brought in connection with an audit of any royalty statement unless
such action is brought within one (1) year after the date of the commencement
of
any such audit.
(e) If
SpiralFrog is required by law to withhold any taxes or other moneys
("withholdings") from any payment due to IODA, SpiralFrog will
deliver to IODA an official receipt evidencing SpiralFrog's payment of the
tax
or other amount withheld and such other documentation as IODA may require to
obtain credit against IODA's taxes for the withholding concerned. If
that documentation is not furnished or if that tax credit is not available
to
IODA, SpiralFrog will bear the obligation concerned at its own expense without
recourse to IODA and will remit the full amount of the payment concerned to
IODA
without deduction; if the withholding concerned has already been deducted from
payments to IODA, SpiralFrog will remit the amount of the withholding to IODA
upon IODA's request.
(f) All
payments to IODA 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 originally
received by SpiralFrog, minus all related currency conversion and/or
transactional fees paid by SpiralFrog.
(g) If
SpiralFrog is actually prevented by law or government order from making any
payment to IODA in United States dollars, SpiralFrog will promptly notify IODA
and will not commingle the moneys concerned with SpiralFrog's other assets
or
with the property of any other person or entity, but will hold those moneys
separately and in trust for IODA or deposit them as IODA instructs in
writing. SpiralFrog will continue to be obligated for each such
amount, with interest at the local equivalent "prime" commercial rate, until
IODA (or the depository so designated by IODA) has actually received
it.
(h) Insurance.
During the Term and for one (1) year thereafter, SpiralFrog at its sole cost
and
expense will procure and maintain from a reputable insurance company general
liability insurance and errors and omissions insurance coverage sufficient
to
cover any losses or damages arising out of SpiralFrog’s activities
hereunder.
(i) In
addition to the foregoing, if SpiralFrog makes available to
other distributors of audio or audio visual recordings
(“Other Label(s)”) reports that state when Distributed Content
first becomes available to Users, then SpiralFrog will provide such a report
to
IODA.
4. Distributed
Content /Takedown Procedure.
(a) The
rights granted hereunder shall apply solely to the Master Recordings, A/V Master
Music Video Recordings, A/V Master Non-Music Video Recordings and Related
Content delivered by IODA to SpiralFrog. Subject to IODA’s standard
opt-out provision in Section 1(A) of this Agreement, IODA will deliver or make
readily available new Master Recordings, A/V Master Music Video Recordings,
A/V
Master Non-Music Video Recordings, and Related Content no less often than IODA
updates its other digital-service and retail partners. In the event IODA
provides other digital-service and retail partners with distributed content
lists, then IODA shall provide SpiralFrog with the same and no less frequently
than IODA updates its other digital-service and retail partners.
(b) If
any
Distributed Content ceases to be owned or controlled by IODA for any reason,
or
if a third party formally challenges IODA’s rights in a Master Recording, A/V
Master Music Video Recording or A/V Master Non-Music Video Recording where
such
challenge may have a material affect on the rights granted under this Agreement,
then upon IODA’s written notice and request, SpiralFrog shall remove access to
such Master Recording, A/V Master Music Video Recording, A/V Master Non-Music
Video Recording and/or Music Lyrics from the Service within three (3) business
days of such request. IODA, its Represented Labels and/or affiliated
parties shall not exercise the takedown right described in this paragraph in
a
manner that would defeat or frustrate the rights granted to SpiralFrog under
the
Agreement.
(c) SpiralFrog
shall not exploit the rights conveyed herein relating to any Distributed Content
prior to the official USA release date of an album embodying such Distributed
Content, provided IODA provides SpiralFrog with sufficient advance notice in
the
metadata. Further and notwithstanding the foregoing, SpiralFrog may
exploit those rights conveyed herein before such release date to the extent
that
SpiralFrog must reproduce Distributed Content to receive, store, and prepare
its
availability to Users (for example, as ephemeral copies) without distributing
it
to Users.
5. SpiralFrog’s
Third-Party Obligations.
Except
as
specifically set forth herein, SpiralFrog 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, SpiralFrog
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. Additionally, SpiralFrog will be responsible
for
securing public performance licenses and paying all associated fees for the
public performance of Distributed Content including without limitation Master
Recordings, A/V Master Non-Music Video Recordings and A/V Master Music Video
Recordings.
6. IODA’s
Third-Party Obligations.
(a) IODA
shall be responsible for paying any and all royalties to Represented Labels,
and/or other persons resulting from SpiralFrog’s reproduction, sale,
transmission, distribution, promotion and/or use of Distributed Content and
Related Content as authorized under this Agreement (excluding, for avoidance
of
doubt, any copyrighted musical compositions embodied therein and the public
performances of any Distributed Content as set forth in Section 5 of the
Standard Terms and Conditions above).
(b) IODA
shall make reasonable efforts to provide any necessary parental advisory
warnings (if and to the extent artists and record labels furnish same to IODA)
in connection with the Distributed Content.
7. Intellectual
Property.
(a) Ownership
of Distributed Content. All right, title and interest in and to
the Distributed Content, including all intellectual property rights inherent
therein are owned or controlled by IODA. SpiralFrog will not hereunder contest,
or assist others in contesting, IODA’s rights or interests in the IODA Content,
or the validity of such ownership. Without limiting the generality of the
foregoing, this Agreement does not grant to SpiralFrog: (i) any
copyright ownership interest in any IODA Content; (ii) any rights outside the
Territory; or (iii) any rights to any endorsement by IODA. SpiralFrog
will not attempt, represent, or purport to transfer to any person any rights
of
ownership in or to any of the IODA Content.
(b) Ownership
of SpiralFrog Service and Related Systems. As between SpiralFrog
and IODA, SpiralFrog owns all right, title and interest in and to the Service
(subject to ownership of Distributed 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 SpiralFrog. IODA understands and agrees that it
shall not acquire any right, title or interest in or to the 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 SpiralFrog. IODA will not contest, or assist other non-affiliated
parties in contesting, SpiralFrog’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. SpiralFrog 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 SpiralFrog’s discretion, SpiralFrog may provide
IODA with anonymous, aggregate consumer data related to IODA’s Distributed
Content.
8. Representations,
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;
(v) that
party’s performance hereunder will not violate federal, state or local laws,
regulations and ordinances; and,
(vi) 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) IODA
hereby warrants and represents to SpiralFrog that:
(i) IODA
owns
or controls the Distributed Content and has the right to grant all rights
granted herein to the Distributed Content;
(ii) IODA
is a
duly organized and existing company in good standing under the laws of its
place
and country of formation, and has the right, power and authority to enter into
this Agreement, to grant the rights agreed to be granted by IODA
hereunder.
(iii) IODA
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 SpiralFrog’s full and complete 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 SpiralFrog’s promotion or
exploitation of the Distributed Content and Related Content as set forth herein
throughout the universe during the Term.
(c) SpiralFrog
hereby represents and warrants to IODA that:
(i) SpiralFrog
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 Distributed Content and related artwork and metadata shall only reside
on
servers owned, authorized or controlled by SpiralFrog.
(d) SpiralFrog
agrees to indemnify, defend and hold harmless IODA and its respective officers,
employees and agents (“IODA Indemnitees”) from and against any
losses, injuries, damages, claims, expenses and costs (including without
limitation reasonable attorneys’ fees) (“Claims”) incurred or
suffered by any IODA Indemnitee, arising from any third-party actions, claims,
suits or legal proceedings of any kind, caused by, arising from or related
to: (i) SpiralFrog’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 Service or SpiralFrog’s business;
and (iii) any acts or omissions of any SpiralFrog employee or
agent. IODA shall promptly notify SpiralFrog in writing of any Claim
and allow SpiralFrog to control the defense thereof.
(e) IODA
agrees to indemnify, defend and hold harmless SpiralFrog, its respective
officers, employees and agents, (collectively, the “SpiralFrog
Indemnitees”) from and against any losses, injuries, damages, claims,
expenses and costs (including without limitation reasonable attorneys’ fees)
(“Claims”) incurred or suffered by any SpiralFrog Indemnitee,
arising from any third-party actions, claims, suits or legal proceedings of
any
kind, caused by, arising from or related to: (i) IODA’s failure to perform any
of its obligations under this Agreement and/or any breach or alleged breach
of
any representation or warranty hereunder; and (ii) any acts or
omissions of any IODA employee or agent. SpiralFrog shall promptly
notify IODA in writing of any Claim and allow IODA to control the defense
thereof.
(f) EXCLUSION
OF WARRANTIES. THE EXPRESS WARRANTIES IN THIS AGREEMENT WILL BE IN
LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING THE IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
9. Termination;
Survival.
(a) IODA
shall have the right to terminate this Agreement after providing thirty (30)
days’ prior written notice to SpiralFrog in the event of a material breach of
any provision of this Agreement, only if during such thirty (30) day period,
SpiralFrog fails to cure such alleged breach. The foregoing notice
and cure period shall not apply in the event: (i) SpiralFrog breaches in a
material respect Section 4 of the Standard Terms and Conditions above, or (ii)
if SpiralFrog purports to assign any of its rights and/or obligations hereunder
to a third party except as specifically permitted hereunder, without IODA’s
prior, written consent.
(b) SpiralFrog
shall have the right to terminate this Agreement at any time on thirty (30)
days’ prior written notice to IODA, in the event of a material breach of any
provision of this Agreement, only if during such thirty (30) day period, IODA
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 Section,
each User’s rights to the Distributed 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. Assignment.
This
Agreement shall not be assignable by either party without the prior written
consent of the non-assigning party and any such assignment shall be invalid
ab
initio. Notwithstanding the preceding sentence, IODA may assign this
Agreement in conjunction with a transfer, merger and/or acquisition of a
substantial portion of the assigning party’s business, stock, or assets, or to
any entity controlled by, controlling or under common control with the assigning
party.
11. Arbitration.
All
disputes of any kind, nature or description arising in connection with the
terms
and conditions of this Agreement shall be submitted to arbitration in the City
of San Francisco, County of San Francisco, and State of California under the
then prevailing rules of the American Arbitration Association by an arbitrator
or arbitrators to be selected as follows: Each of the parties shall, by written
notice to the other, have the right to appoint one arbitrator. If, within ten
(10) days following the giving of such notice by one party the other shall
not,
by written notice, appoint another arbitrator, the first arbitrator shall be
the
sole arbitrator. If two arbitrators are so appointed, they shall appoint a
third
arbitrator. If ten (10) days elapse after the appointment of the second
arbitrator and the two arbitrators are unable to agree upon the third
arbitrator, then either party may, in writing, request the American Arbitration
Association to appoint the third arbitrator. The award made in the
arbitration shall be binding and conclusive on the parties and judgment may
be,
but need not be, entered in any court having jurisdiction. Such award shall
include the fixing of costs, expenses, and attorneys’ fees of arbitration, which
shall be borne by the unsuccessful party.
12. No
Partnership.
Nothing
contained herein shall be construed to place the parties in the relationship
of
partners or joint venturers, and SpiralFrog shall have no power to obligate
or
bind IODA in any manner whatsoever.
13. Notices.
All
notices required hereunder shall be in writing and shall be given either by
personal delivery, facsimile or by registered or certified mail (postage
prepaid), and shall be deemed given hereunder (unless actual receipt is
hereinabove required) on the date delivered, or faxed or a date two business
days after the date mailed. Until further notice, the addresses of
the parties shall be as follows:
SPIRALFROG:
Mohen,
Inc.
00
Xxxxxx
Xxxxxx
Xxx
Xxxx,
XX 00000
Attn: Chief
Executive Officer
With
a
courtesy copy to:
Xxxxxx
Xxxxxxx & Xxxx LLP
Xxx
Xxxxxxx Xxxx Xxxxx
Xxx
Xxxx,
XX 00000
Attn: Xxxxx
Xxxxxxx, Esq.
IODA: Copies
to both:
IODA
Inc.
000
Xxxxxx Xxxxxx
Xxxxx
000
Xxx
Xxxxxxxxx, XX 00000
Attn: Chief
Executive Officer
IODA
Inc.
000
Xxxxxx Xxxxxx
Xxxxx
000
Xxx
Xxxxxxxxx, XX 00000
Attn: Legal
Department
Each
party will provide current contacts for each of technical, marketing, content,
financial and publicity matters. IODA will provide notices regarding
territorial restrictions in the metadata accompanying the Distributed
Content. The initial list of such contacts for each party is attached
as Exhibit E.
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 SpiralFrog 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 SpiralFrog; (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’s 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. Copyright
Notices.
SpiralFrog
shall cause all copyright notices relating to uses of Distributed
Content to be conspicuously displayed upon the web page by means of
which SpiralFrog’s customers commence use of the Distributed Content and related
metadata. Each copyright notice shall be displayed in the following
format, as designated by IODA in each instance for the download
concerned: “(P) (C) [Year of first publication] [IODA-designated
name].” SpiralFrog shall not, through its acts or omissions, defeat,
impair or alter in any way any copyright protection technology, metadata or
mechanism embedded in or associated with the Distributed Content or any related
artwork or materials delivered by IODA hereunder. SpiralFrog shall
not contest, or voluntarily assist others in contesting, IODA’s rights or
interests in the Distributed Content or the validity of such ownership at any
time, during or after the Term.
15. Entire
Agreement/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
Majeure.
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;
Severability; 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 reference 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”
SpiralFrog
Service Description
Exhibit
“B”
IODA
Export SpecificationsExhibit “C”
Excluded
Territories
[See
Metadata]Exhibit “D”
Encoding
And Delivery Agreement
This
Encoding and Delivery Agreement is made this ____ day of August, 2007, by and
between Mohen Inc. d/b/a SpiralFrog (“SpiralFrog”), and
Independent Online Distribution Alliance, Inc.
(“IODA”).
Reference
is hereby made to that
certain Digital Music and Video Distribution
Agreement between IODA and SpiralFrog
(“Agreement”) of equal date hereto. All capitalized
terms in this letter agreement shall have the meanings ascribed to them in
the
Agreement.
(a) (i) Subject
to the terms contained herein, SpiralFrog agrees to pay to IODA
the following encoding and delivery fees (“E&D
Fees”) as follows: (A) Fifty Thousand Dollars ($50,000) payable upon
full execution of the Agreement; and (B) Fifty Thousand Dollars ($50,000)
(“2nd
Payment”) payable within thirty (30) days of IODA delivering or making
available to Spiral Frog the total number of Master Recordings IODA warrants
and
represents are considered Distributed Content as of the date the first Opt-Out
Period ends (“Initial Delivery”); and (C) and ten cents ($.10)
per each additional Master Recording delivered to SpiralFrog after the Initial
Delivery.
(ii) In
the event the Initial Delivery is less than 75% of the total number of
full-length Master Recordings encoded and available for delivery throughout
the
Territory (“Available Masters”) on the Effective
Date, then the 2nd Payment payable will be Fifty Thousand Dollars ($50,000)
multiplied by the Deliverable Share. The Deliverable Share shall equal a
fraction, the numerator of which shall be the Initial Delivery, and the
denominator of which shall be the Available Masters. For clarity and by way
of
example, if the Initial Delivery to SpiralFrog contained only 745,000 Master
Recordings the 2nd Payment
amount
would equal $37,250 ($50,000 multiplied by the following fraction
(745,000/1,000,000).
(b) In
exchange for the E&D Fees IODA agrees to deliver the following:
(i) one full-length stereo encoding in WMA format (192 kbps) of each Master
Recording delivered to SpiralFrog throughout the Term, and (ii) one thirty
second (0:30) stereo extract Preview Clip of such Master Recording in WMA format
(64 kbps).
Unless
otherwise agreed, the foregoing initial media delivery shall be delivered from
IODA to SpiralFrog at SpiralFrog’s expense on hard
drive(s). SpiralFrog shall supply its own compatible hard drive(s),
or upon request IODA will supply a 000 XX (xxx0 port) hard drive to SpiralFrog
at IODA’s cost, currently $180 plus shipping but subject to
change. Subsequent deliveries may be made via hard drive or over
FTP.
Along
with each encoding delivery, IODA will deliver Metadata for each encoding,
formatted as specified in the IODA Export Specifications (v1.16)
attached hereto as Exhibit B and hereby incorporated. IODA reserves
the right to make changes to the IODA Export Specifications from
time-to-time throughout the Term upon reasonable notice to
SpiralFrog. Artwork image files will be delivered in JPG format at
the size of 300 x 300, at 300 dpi.
Exhibit
“E”
Contacts
IODA
contacts:
SpiralFrog
contacts:
1. Technical:
Mr.
Vesa
Suomalainen, CTO, xxxx@xxxxxxxxxx.xxx, 206-605-8201
Xxx
Xxxxxxxx, CIO, xxx@xxxxxxxxxx.xxx, 000-000-0000
2. Marketing/Standards
and Publicity:
Xxxxxxx
Xxxxx, Marketing Officer
xxxxxxx.xxxxx@xxxxxxxxxx.xxx,
000-000-0000
3. Content
and Financial:
Xxxxxxx
Xxxxxx, VP, Entertainment Programming
xxxxxxx@xxxxxxxxxx.xxx,
000-000-0000
Exhibit
“F”
SpiralFrog
Content Delivery Standards
Exhibit
“G”
IODA
Reporting Specifications
See
the
Excel File entitled IODA Report Data Spec 2.0 which contains the Fields and
Elements Outlined Below:
[Missing
Graphic Reference]
