EXHIBIT 10.6
LIQUID MUSIC NETWORK
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SYNDICATION LICENSE AGREEMENT
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WHEREAS Liquid Audio, Inc., a California corporation, with offices at 000
Xxxxxxx Xxxxxx, Xxxxxxx Xxxx, Xxxxxxxxxx 00000, hereinafter referred to as
"Liquid Audio," owns and operates the Liquid Music Network (the "LMN"), pursuant
to which Liquid Audio distributes on a syndicated basis an exclusive database of
music programming and other content for public performance and digital delivery
to select Web sites that are licensed as LMN syndication affiliates; and
WHEREAS _________, a ____________ corporation with offices at
_____________________________________, hereinafter referred to as "Licensee",
wishes to be licensed as a syndication affiliate of the Liquid Music Network and
receive the right to carry the LMN programming for distribution through
Licensee's Web site or sites, upon the terms and conditions set forth in
Schedule "A" to this Agreement;
NOW THEREFORE THE PARTIES HEREBY AGREE AS OF THIS _____ DAY OF __________
199__ ("EFFECTIVE DATE") AS FOLLOWS:
PROGRAMMING CATEGORIES: All
LICENSED WEB SITES: [insert Licensee URLs]
LICENSE PERIOD: One year from Effective Date
LICENSE GRANTED: Web site redistribution
ANNUAL SYNDICATION FEE: $ 0
ADVERTISING REVENUE: 100% retention of Licensee Advertising.
DIGITAL MUSIC COMMERCE REVENUE: Licensee receives Net Revenue from sales.
CD/TANGIBLE MUSIC COMMERCE REVENUE: 50% of any referral fees received.
MUSICPLAYER & MUSICPLAYER CD: 10% of Music Player CD net revenue.
LOGO/ICON LICENSE: Yes
IN WITNESS THEREOF, the parties hereto have executed this Agreement as of
the date first above written.
FOR LIQUID AUDIO, INC.: FOR LICENSEE:
BY:___________________________ BY:___________________________
TITLE:________________________ TITLE:________________________
DATE:_________________________ DATE:_________________________
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SCHEDULE "A"
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LIQUID MUSIC NETWORK
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SYNDICATION LICENSE STANDARD TERMS AND CONDITIONS
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Annexed to and made part of that certain Syndication License Agreement
("Agreement") dated as of __________________, 199__, between Liquid Audio, Inc.
("Liquid Audio") and ________ ("Licensee").
I. Definitions.
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"Licensed Web Sites" means the Web sites owned or controlled by Licensee as
identified by the URLs listed in the Main Agreement.
"Link(s)" means one or more hyperlinks established from within the Licensed Web
Sites to one or more pages within the LMN Site(s), as designated by Liquid
Audio, to enable an end user of the Licensed Web Site to access the LMN
Programming.
"LMN Logo and Artwork" means the logo(s) for the LMN designated by Liquid Audio,
and all artwork, graphics, and other content provided by Liquid Audio for use in
connection with the Links.
"LMN Programming" means the compilation database owned by Liquid Audio and
marketed as the Liquid Music Network, comprised of sound recordings made
available by Liquid Audio in the Programming Categories identified in Schedule
"B" (including forty-five (45) second or less samples of such sound recordings),
and all other graphics, text, video, and other related content now or hereafter
offered by Liquid Audio in connection with the foregoing.
"LMN Site(s)" means the Web site(s) designated by Liquid Audio which operate
Liquid Audio's server and commerce software to deliver the LMN Programming to
LMN end users via the Licensed Web Sites.
"Music Commerce Transactions" means the purchase by an end user who accesses the
LMN Programming via the Licensed Web Sites of (i) one or more intangible copies
of a sound recording offered via the LMN Programming, with online fulfillment of
such sale by digital delivery and downloading from the LMN Sites to the end
user's computer hard drive; and/or (ii) one or more phonorecords offered via the
LMN Programming, including without limitation on compact disc, cassette tape or
other tangible media, with offline fulfillment of the sale made online at the
LMN Site or using a telephone number made available from the LMN Site.
II. License Grant. Subject to the payment by Licensee of the syndication
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license fee set forth in Section IX below, Liquid Audio grants and Licensee
accepts a limited, personal, nontransferable, nonexclusive license as an LMN
syndication affiliate (i) to make available, carry, and distribute the LMN
Programming via the Licensed Web Site(s) to end users; and (ii) subject to
compliance with Liquid Audio's branding and advertising guidelines and Section
VIII below, to use the LMN Logo and Artwork as an icon to create one or more
Links to the LMN Site.
III. Reservation of Rights. The license herein granted shall be limited to the
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rights expressly set forth above. All other rights to the LMN Programming are
expressly reserved by Liquid Audio. Without limiting the foregoing, Licensee
may not sublicense or resell the LMN Programming, and Licensee shall impose no
requirements of any kind or character whatsoever for end users to access the LMN
Programming via the Links, including without limitation, any subscription or
access fee or registration requirement to activate the Link to the LMN
Programming.
IV. Joint Promotional Obligations Liquid Audio will promote Licensee by
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including a logo and copy in a high profile location on Liquid Audio's web site,
and Licensee will promote Liquid Audio by including a logo and copy in a high
profile location on Licensee's web site. Liquid Audio and Licensee will each
promote the other and the relationship described within the agreement
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at any appropriate trade shows. Liquid Audio and Licensee will joint release a
press release concerning the relationship described in this Agreement. Both
parties will agree to the language of the press release before it is issued.
V. Liquid Audio Obligations Liquid Audio will include Licensee on the LMN
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Site in an area in which Liquid Audio describes the LMN, and Liquid Audio will
provide a link from this portion of its site to Licensee's home page. In
connection with the distribution of the LMN Programming via the Licensed Web
Sites, Liquid Audio will enable end users (i) to preview a performance of a
sample of one or more sound recordings, (ii) to engage in Music Commerce
Transactions, and (iii) to download a copy of the then-current Liquid Audio
standard player software. Liquid Audio acknowledges that Liquid Audio and its
designees, and not Licensee, will be solely responsible for enabling the
foregoing functionality with Liquid Audio's technology and any third party
technology obtained by Liquid Audio, including without limitation all aspects of
online and offline fulfillment and processing of Music Commerce Transactions.
Notwithstanding the foregoing, where appropriate with respect to physical CD
products, Liquid Audio will consider utilizing any preferred vendor and/or
fulfillment source for these transactions and fulfillment designated by
Licensee, provided that such preferred vendor carries the appropriate inventory
to fulfill orders as reasonably required by Liquid Audio, and subject to
implementation of the appropriate technology within the LMN by Liquid Audio.
Licensee acknowledges that pricing and all other matters relating to Music
Commerce Transactions will be solely determined by Liquid Audio and/or its
licensors.
VI. Syndication Affiliate Obligations. In consideration of the exclusive
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nature of the LMN Programming offered to Licensee hereunder, the foregoing
license requires that the LMN Programming be featured in a premiere position on
the Licensed Web Sites, which shall include at minimum (i) placement of the LMN
Logo as a Link on the "home page" of the Licensed Web Sites, or if no third-
party content appears on the "home page" then in the first page thereafter that
does so (and/or on other mutually agreed pages of sufficient prominence); (ii)
the most prominent placement on all other guides to content on the Licensed Web
Sites as compared to other music-related programming, including without
limitation on the "What's New" or similar pages, on any topical listing of
content available on such site. Licensee agrees that it will use Liquid Audio's
technology as the exclusive audio downloading and audio commerce technology on
the Licensed Web Sites.
VII. Liquid MusicPlayer and Liquid MusicPlayer CD. Licensee will provide a
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download button, in a design consistent with Liquid Audio's branding guidelines,
on the Licensed Web Sites, that enables end users to download the Liquid
MusicPlayer from the Web site. Liquid Audio will license the Liquid MusicPlayer
directly to the end user. Liquid Audio will be responsible for all customer
support of this product. In addition, Licensee will actively promote the sale of
the Liquid MusicPlayer CD on the Licensed Web Sites. Liquid Audio will be
responsible for the fulfillment of the orders of the Liquid MusicPlayer CD from
the Licensed Web Sites as a Music Commerce Transaction under this Agreement.
Liquid Audio will license the Liquid MusicPlayer CD directly to the end user.
Liquid Audio will be responsible for all customer support of this product.
Liquid Audio will provide to Licensee separate Web pages, for inclusion within
the Licensed Web Sites, which explain the relevant aspects of the Liquid Audio
system, and especially the Liquid MusicPlayer and the Liquid MusicPlayer CD.
VIII. Advertising. Upon execution of this Agreement, Licensee agrees to
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commence insertion of banner advertising on the Licensed Web Sites announcing
the coming of the LMN. Liquid Audio will work with Licensee to design these
banner ads. Upon launch of the LMN on the Licensed Web Sites, Licensee may
create and maintain for its own account a frame that surrounds the LMN
Programming for end users who access the LMN via the Licensed Web Sites. With
respect to such frame, Licensee shall have the right to independently sell
advertising for such frame and shall retain for its own account all advertising
revenue derived therefrom. Notwithstanding the foregoing, Liquid Audio will be
responsible for the final approval of the framing space and shall have the right
to finally resolve any advertising booking conflict or to veto any advertising
that is competitive with Liquid Audio or the LMN. With respect to the page(s) on
the Licensed Web Sites which contain the Link(s) to the LMN Programming,
Licensee shall also control all advertising and other content on such page, and
shall retain all revenue derived therefrom, provided that no such advertising or
content shall be placed in direct relation to the Link such as to cause dilution
or consumer confusion with respect to the association of the Link to such
advertising or content. Liquid Audio shall control all other aspects of the LMN
Programming, including without limitation any advertising or promotional
activities contained therein, and shall retain any and all revenue derived from
such advertising and promotional activities. Each party shall be responsible for
serving its own advertising hereunder, and as such, neither party shall be
obligated to report tracking or usage data for advertising purposes hereunder.
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IX. Payments.
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(a) Licensee shall pay Liquid Audio the annual syndication license fees for
the Programming Categories selected by Licensee as set forth in Exhibit "B".
The parties agree that timely payment of all license fees by Licensee is of the
essence of this Agreement, and any failure by Licensee to make such timely
payment shall constitute a material default hereunder. Any payment hereunder
not made within thirty (30) days after due date shall bear interest at the rate
of 1% per month or the maximum rate allowed by law, whichever is less.
(b) With respect to Music Commerce Transactions involving distribution via
digital delivery, Liquid Audio shall pay to Licensee the Net Revenue derived
from sales. "Net Revenue" means the actual retail sales price paid by the
customer for the applicable track(s) sold (if different than list price), less
any sales tax included therein, the wholesale price of the applicable track(s)
sold, bank transaction processing fees, [and any applicable mechanical rights
fees that may not be included within the wholesale price]. The parties
acknowledge that Liquid Audio will determine the list and actual retail selling
price to customers in its sole discretion, unless otherwise agreed, and that the
record label or other content owner will determine the wholesale price in its
sole discretion.
(c) With respect to sales of the Liquid MusicPlayer CD, Liquid Audio shall
pay Licensee a fee for each sale as set forth in the Main Agreement.
(d) With respect to Music Commerce Transactions involving distribution on
CDs and other tangible media, Liquid Audio shall pay to Licensee the following:
(i) where Licensee is not the vendor and does not have a preferred vendor
arrangement, the applicable percentage of Liquid Audio's referral fees, as set
forth in the Main Agreement, received from any preferred vendor arrangement
maintained by Liquid Audio.
(e) With respect to Music Commerce Transactions involving distribution on
CDs and other tangible media, Licensee shall pay to Liquid Audio the following:
(i) where Licensee is the vendor, the applicable referral fee, as set forth in
the Main Agreement, and (ii) where Licensee is not the vendor but has a
preferred vendor arrangement, the applicable percentage of Licensee's referral
fees, as set forth in the Main Agreement, received from such preferred vendor.
(f) Subject to the foregoing, the parties' sole compensation under this
Agreement shall be the mutual benefit derived from offering the LMN Programming
on the Licensed Web Sites and each party shall retain all revenues derived from
their respective activities, including without limitation, all advertising
revenue derived by each party pursuant to Section VIII above.
X. Statements. Each party shall provide the other party with a statement of
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any amount payable arising from Music Commerce Transactions and shall tender the
appropriate amount due to the other party within thirty (30) days after the end
of each calendar month; provided, however, that any total amount payable that is
less than $100 may be retained until the aggregate amount payable equals or
exceeds $100. The statement shall contain sufficient information for the other
party to accurately verify the amounts due and payable, including (i) the net
amount of any referral fees, the calculation of such net amount, and the source
of any referral fees, and (ii) for direct sales, the sale price, the quantity
sold, the gross receipts generated, and an itemization of the permitted
deductions, if any. Liquid Audio reserves the right to suspend payments to
Licensee hereunder in the event of any delay, failure or incompleteness by
Licensee in its payment or reporting obligations hereunder.
XI. Warranties. Liquid Audio warrants that it is the sole owner of the LMN
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Programming compilation database, and except with respect to public performance
of music works which is provided for in Section XII below, it has all rights
necessary to license the LMN Programming as provided herein. Subject to the
performance by Licensee of its obligations hereunder, Liquid Audio will
indemnify Licensee against any damages awarded in any final judgment entered
against Licensee or settlement approved by Liquid Audio, as a result of a breach
of any warranty made by Liquid Audio hereunder or by reason of a claim that the
exercise by Licensee of the rights granted herein infringes the rights of
others, provided, however, prompt detailed notice in writing of such claim is
provided to Liquid Audio. Liquid Audio shall have full control over the defense
and/or settlement of any such claim or litigation including the right to engage
its own counsel and Licensee shall not continue the distribution of such LMN
Programming thereafter without the written consent of Liquid Audio. Licensee
shall cooperate fully with Liquid Audio in the defense or settlement of any such
claim or litigation. Licensee will indemnify Liquid Audio from all claims or
liabilities
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including without limitation reasonable attorneys' fees arising from the breach
of this Agreement by Licensee or from the distribution of any material on the
Licensed Web Sites other than material contained in the LMN Programming as
delivered by Liquid Audio.
XII. Music Rights. Liquid Audio warrants to the best of its knowledge that the
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public performance rights in the musical works contained in the LMN Programming
are (i) controlled by ASCAP, BMI, SESAC or a performing rights society having
jurisdiction, (ii) in the public domain, or (iii) controlled by Liquid Audio or
its licensors. If musical works in category (iii) above are contained in the LMN
Programming, a limited public performance license is deemed to be included
within the scope of the license set forth in Section II above. If musical works
in category (i) above are contained in the LMN Programming, Licensee shall
contact BMI, ASCAP or the appropriate public performing rights organization to
obtain a license covering the uses contemplated by this Agreement, which may
include any preferred rates that may now or hereafter be negotiated by Liquid
Audio on behalf of its syndication licensees. Licensee at its sole cost and
expense shall be responsible for obtaining all licenses necessary to perform
such musical works, and Licensee agrees to indemnify Liquid Audio against any
liability loss or expenses arising form the performance of such musical works
via the Licensed Web Sites without such a license.
XIII. Withdrawal and Substitutions. Liquid Audio may in its absolute
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discretion withdraw permanently or temporarily any licensed sound recording or
other content from the LMN Programming if Liquid Audio determines in its sole
discretion that the distribution thereof would or might infringe the rights of
others, violate any law or governmental rule or regulation, interfere with
actual or contemplated use of the particular licensed LMN Programming for any
purpose other than the distribution by Licensee or subject Liquid Audio to any
potential liability or litigation. In the event any part of the LMN Programming
is withdrawn on a temporary basis or permanent basis, Licensee shall be entitled
to delivery of substitute LMN Programming designated by Liquid Audio of
comparable quality.
XIV. Term and Termination.
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(a) This Agreement will become effective on the Effective Date and shall
continue in effect for the period set forth in the Main Agreement unless
otherwise terminated or canceled as provided herein. This Agreement shall
automatically renew for one or more renewal terms of one (1) year each at the
end of the initial term of any renewal term unless either party tenders written
notice of its intent to terminate at least thirty (30) days prior to the
scheduled expiration date.
(b) Either party hereto may, at is option, and without notice, terminate
this Agreement, effective immediately, should the other party hereto (i) admit
in writing its inability to pay its debts generally as they become due; (ii)
make a general assignment for the benefit of creditors; (iii) institute
proceedings to be adjudicated a voluntary bankrupt, or consent to the filing of
a petition of bankruptcy against it; (iv) be adjudicated by a court of competent
jurisdiction as being bankrupt or insolvent; (v) seek reorganization under any
bankruptcy act, or consent to the filing of a petition seeking such
reorganization; or (vi) have a decree entered against it by a court of competent
jurisdiction appointing a receiver liquidator, trustee, or assignee in
bankruptcy or in insolvency covering all or substantially all of such party's
property or providing for the liquidation of such party's property or business
affairs.
(c) In the event that either party commits a material breach of its
obligations hereunder, the other party may, at its option, terminate this
Agreement, by thirty (30) days written notice of termination, which notice shall
identify and describe the basis for such termination; provided, however, that
if, prior to expiration of such period, the defaulting party cures such default,
termination shall not take place.
(d) Upon any termination of this Agreement, Sections III and XV shall
survive the termination of this Agreement. Licensee shall immediately return to
Liquid Audio all copies of the LMN Logo and Artwork and all other Liquid Audio
materials in Licensee's possession or control. Licensee shall deactivate all
Links to the LMN Sites and shall not create any links thereto without the prior
consent of Liquid Audio.
XV. Confidential Information
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(a) Each party acknowledges that by reason of its relationship to the
other party under this Agreement it will have access to certain information and
materials concerning the other party's business, plans, customers, technology
and products that are confidential and of substantial value to such party
(referred to in this Section as "Confidential Information"), which value would
be impaired if such Confidential Information were disclosed to third parties.
The terms of this Agreement shall be deemed to constitute the Confidential
Information of Liquid Audio. Each party agrees to maintain all Confidential
Information received from the other, both orally and in writing, in confidence
and agrees not to disclose or otherwise make available such Confidential
Information to any third party without the prior written consent of the
disclosing party. Each party further agrees to use the Confidential Information
only for the purpose of performing this Agreement. No Confidential Information
shall be deemed confidential unless so marked if given in writing or, if given
orally, identified as confidential orally prior to disclosure and confirmed in
writing within thirty (30) days; provided, however, that Licensee agrees that
any Confidential Information in whatever form relating to the design,
functionality, operational methods or coding of Liquid Audio software, including
but not limited to any complete or partial source or object code versions of
such software, shall be deemed Confidential Information of Liquid Audio
regardless of the presence or absence of any confidential markings or
identification.
(b) The parties' obligations under this Section XV shall not apply to
Confidential Information which: (i) is or becomes a matter of public knowledge
though no fault of or action by the receiving party; (ii) was rightfully in the
receiving party's possession prior to disclosure by the disclosing party; (iii)
subsequent to disclosure, is rightfully obtained by the receiving party from a
third party who is lawfully in possession of such Confidential Information
without restriction; (iv) is independently developed by the receiving party
without resort to the disclosing party's Confidential Information; or (v) is
required by law or judicial order, provided that prior written notice of such
required disclosure is furnished to the disclosing party as soon as practicable
in order to afford the disclosing party an opportunity to seek a protective
order and that if such order cannot be obtained disclosure may be made without
liability. Whenever requested by a disclosing party, a receiving party shall
immediately return to the disclosing party all manifestations of the
Confidential Information or, at the disclosing party's option, shall destroy all
such Confidential Information as the disclosing party may designate. The
receiving party's obligation of confidentiality shall survive this Agreement for
a period of five (5) years from the date of its termination, and thereafter
shall terminate and be of no further force or effect.
XVI. Additional Provisions.
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(a) Licensee acknowledges that each music offering included in the LMN
Programming category or categories was individually licensed and separately
priced, and that Liquid Audio offered each music offering without discrimination
and without conditioning the licensing of any one music offering upon the
licensing of any other music offering.
(b) Neither party shall be liable to the other for any delay in delivery or
inability to distribute the LMN Programming due to acts of God, failure of
carriers, labor disputes, failure or delay in software encoding, war, public
disaster or any other cause beyond the control of the parties and such
performance shall be excused to the extent of such force majeure event.
(c) Licensee shall pay without imitation any tax, levy or charge whatsoever
by any statute, law, rule or regulation now or hereafter in effect, related to
the license fees payable under this Agreement, it being the intent hereof that
the license fees herein shall be a net amount, free and clear any such taxes,
levy or charges whatsoever, except for any taxes on Liquid Audio's net income.
(d) Neither the license granted to Licensee hereunder nor this Agreement
may be assigned by Licensee without the prior written consent of Liquid Audio,
nor shall Licensee sublicense or relicense any of the LMN Programming licensed
hereunder, or enter into any third-party linking arrangements with respect
thereto without Liquid Audio's prior written consent. Subject to the foregoing,
this Agreement shall be binding upon and inure to the benefit of the parties and
their successors and assigns.
(e) The headings of paragraphs hereof are inserted only for the purpose of
convenient reference; such headings shall not be deemed to govern, limit,
modify, or in any manner affect the scope, meaning or intent of the provisions
of this Agreement or any part or portion thereof; nor shall they otherwise be
given any legal effect.
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(f) Nothing herein contained shall constitute a franchise relationship, or
partnership between, or joint venture by, Licensee and Liquid Audio, or
constitute Licensee or Liquid Audio the agent of the other.
(g) All notices hereunder will be hand delivered or sent by certified or
registered mail to the parties at the addresses set forth above, or to such
other addresses as may be designated by the parties in writing. A mandatory copy
of all notices delivered or sent to Liquid Audio shall be sent to Xxxxxx Xxxxxxx
Xxxxxxxx & Xxxxxx, 000 Xxxx Xxxx Xxxx, Xxxx Xxxx, Xxxxxxxxxx 00000-0000,
Attention: Xxxx Xxxxx, Esq.
(h) This Agreement shall be construed in accordance with the applicable laws
of the State of California with respect to agreements executed and to be fully
performed in that state.
(i) This Agreement represents the entire understanding of the parties and
shall not be amended or modified except in writing signed by both parties
hereto; nor may any provision hereof be waived unless in writing signed by the
party to be charged with such waiver.
(j) If there is a conflict between any provision(s) of this Agreement and
any statute, law or regulation, the statute, law or regulation, shall prevail,
provided, however, that in such event the provision(s) of this Agreement so
affected shall be curtailed and limited only to the minimum extent necessary to
permit compliance with the minimum requirement of such statute, law or
regulation, and no other provisions of this Agreement shall be affected thereby
and all such other provisions shall continue in full force and effect.
(k) Licensee agrees that any litigation, action or proceeding arising out of
or relating to this Agreement shall be instituted in any state or federal court
sitting in the Northern District of California, and Licensee waives any
objection to such venue, irrevocably submits to such jurisdiction and waives any
claim or defense of inconvenient forum.
(l) In no event shall Liquid Audio be liable for consequential, incidental,
special, reliance or indirect damages, however caused, on any theory of
liability, and whether or not Liquid Audio has been advised of the possibility
of such damages.
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SCHEDULE "B"
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LMN Programming Syndication Categories License Fees
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All Categories $ 0
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