LETTERHEAD OF UNIVERSAL] UNIVERSAL MUSIC GROUP AGREEMENT FOR THE INCLUSION OF UNIVERSAL SOUND RECORDINGS AND UNIVERSAL VIDEOS IN ONLINE, ON-DEMAND AD- SUPPORTED SERVICES
[LETTERHEAD
OF UNIVERSAL]
UNIVERSAL
MUSIC GROUP
AGREEMENT
FOR THE INCLUSION OF
UNIVERSAL
SOUND RECORDINGS AND UNIVERSAL VIDEOS IN
ONLINE,
ON-DEMAND AD-SUPPORTED SERVICES
The
parties (each a “Party” and, collectively, the “Parties”) hereto
are:
UMG
Recordings, Inc., with offices at 0000 Xxxxxxxx Xxxxxx, Xxxxx Xxxxxx,
Xxxxxxxxxx 00000 (“Universal”)
and
Mohen,
Inc., c/o Greenberg Xxxxxxx, 000 Xxxx Xxxxxx, Xxx Xxxx, XX 00000
(“Musicloads”)
The
date
hereof is: May 30, 2006 (the “Effective Date”)
____________________________________
A. This
agreement, inclusive of Universal’s Standard Terms and Conditions, which are
attached as Exhibit A hereto (the “Standard Terms”), and all other
exhibits and attachments hereto, constitute the entire agreement of the Parties
with respect to the subject master hereof, and are hereinafter collectively
referred to as this “Agreement”.
B. This
Agreement, dated as of the Effective Date, is entered into between Universal
and
Musicloads in order to authorize for inclusion in the online, on-demand service
operated and maintained by Musicloads and supported fully by advertising
revenues (as opposed to subscription fees) certain recorded audio music content
of Universal and its Affiliates during the Term and within the Covered
Territory, upon the terms, and subject to the conditions, contained
herein,
C. Certain
terms used in this Agreement that have not been otherwise defined, have the
meanings assigned to them in Section 1 of the Standard Terms.
1. Specific
Grant of Rights.
(a) Rights.
Upon the terms, and subject to the conditions, restrictions and limitations
set
forth in this Agreement, including, without limitation, full compliance with
the
Service Functionality Description, Universal hereby grants to Musicloads, during
the Term and within the Covered Territory only, a limited, non-exclusive right,
without the right to transfer or sublicense any rights granted herein, except
as
may be specifically provided herein:
(i) to
make Play Events of Universal Sound Recordings and Universal Videos solely
on
the Service in the form of Streams and Conditional Downloads;
(ii) to
make Reproductions of the Universal Sound Recordings and Universal Videos solely
insofar as they are incidental and necessary to make the Play Events described
in clause (i) above;
(iii) to
Reproduce and display the Artwork on the Service and/or the Websites, only
in
connection with the permitted uses of the associated Universal Sound Recording
of Universal Video on the Service; and
(iv) to
store and host Universal Sound Recordings, Universal Videos and Artwork on
the
Servers solely for the purposes of exercising the specific rights granted
hereunder.
(b) No
Other Rights. Any and all rights not expressly granted hereunder are
reserved by Universal.
(c) No
Rights Prior to Release Date. The rights conveyed in this Section 1 of the
Agreement do not apply to any Universal Sound Recordings, Universal Videos
or
related Artwork prior to the. “street date” of the associated album release
within the Covered Territory.
(d) Musicloads
Clients. It is acknowledged and agreed that, subject to Section 2 of the
Standard Terms and all other relevant provisions of this Agreement, Musicloads
may create, host, power and/or support multiple Websites (which Websites may
or
tray not contain Musicloads’s brand or logo) and offer the Service indirectly to
End Users through Musicloads Clients that have been pre-approved in writing
by
Universal. It is understood and agreed by Musicloads that Universal may require
any Musicloads Client to provide additional protections (financial and other)
for the performance of the obligations hereunder including, without limitation,
by means of a security deposit, letters) of credit, guarantee and/or a separate
agreement or direct relationship between Universal and any such Musicloads
Client. For each Musicloads Client, Musicloads shall supply to Universal a
detailed description of such Musicloads Client, the systems and software used
by
such Musicloads Client, the “look and feel” of the Service as offered by such
Musicloads Client and all such other specifics required by Universal (the
“Client Specifics”). All such Client Specifics shall be attached to this
Agreement from time to brae during the Term as Exhibit(s)
B-3.
2. Consideration.
In consideration of the rights granted by Universal to Musicloads
hereunder,
Musicloads
will pay to Universal the amounts set forth in this Section 2.
(a) Advances.
(i) A
cash advance, by wire transfer of immediately available fiends to an account
designated in writing by Universal, equal to: (1) Two Million Two Hundred
Thousand Dollars ($2,200,000), payable upon execution of this Agreement (the
“First Advance”); and (2) Two Million Two Hundred Thousand Dollars
($2,200,000), payable on the earlier of the first anniversary of the launch
of
any version of the Service or November 15, 2007 (the “Second Advance”
and, collectively with the First Advance, the “Advances”). Musicloads shall pay
Two Hundred Thousand Dollars ($200,1100) of each of the First Advance and the
Second Advance directly to Universal Music Canada.
(ii) All
Advances will be non-refundable and recoupable against the Content Fees
described in Section 2(b) below, if any. Notwithstanding the foregoing,
Musicloads may not credit any Content Fees due and payable to Universal against
any Advances, or reduce the amount of any such Advance by the amount of any
such
Content Fees. (By way of example, and not by limitation, if Content Fees payable
to Universal during the last Accounting Period of the first year equal Five
Hundred Thousand Dollars ($500,000), Musicloads will not, and is not authorized
or permitted to, deduct that amount from the Second Advance due at the end
of
the first year (or reduce such Second Advance by such amount).)
(b) Content
Fees. For each Accounting Period during the Term, pursuant to the procedures
set forth in Sections 7 and 8 of the Standard Terms, Musicloads will pay to
Universal, fees (“Content Fees”) for Play Events on the Service, equal to the
Universal Proportionate Share of fifty percent (50%) of Gross Revenues as
defined herein.
(c) All
End Users. For purposes of calculating the Content Fees due hereunder, End
Users will include all End Users of the Service, whether the Service is offered
directly by Musicloads or indirectly through a Musicloads Client.
(d) Publishing
Fees Not Included. The rights granted by Universal to Musicloads under
Section 1 of this Agreement do not include any rights to perform, reproduce
or
otherwise use in any way any musical compositions embodied in the Universal
Sound Recordings or Universal Videos. Musicloads 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, as more fully described in Section 4(b) of the Standard
Terms. Universal will use reasonable efforts to supply Musicloads with
information in Universal’s possession that is necessary to obtain licenses from
music publishers, provided that Universal makes no representation or warranty
with respect to the accuracy or completeness of such information.
(e) Reproduction
Fee. The Content Fees set forth above include consideration for each
compliant Reproduction of Universal Content made by Musicloads during the Term
in strict accordance with the provisions of this Agreement.
(f) Content
Management Costs. If and as applicable, Musicloads will pay Universal’s
then-current standard rate card charges for the delivery of Universal Content
hereunder in electronic file format (or other encoded file format supported
by
Universal), together with any tape and other out-of-pocket costs, such as
delivery or courier charges, as set forth in the Asset & Metadata Recipient
Guide.
3. Term.
The term of this Agreement will commence on the Effective Date (the
“Term”) and end the earlier of (i) two years from the launch of any
version of the Service or (ii) November 15, 2008. The initial beta test of
the
Service scheduled to commence on July 1, 2006 will not be considered as the
launch. Such beta test will he made available to no more than 1,000 total
individual users, consisting of Musicloads employees, representatives from
entertainment content owners (e.g., record labels, film studios) and advertising
agencies and up to 100 outside users (e.g., college students).
4. Territory.
The territory covered hereby is the United States and Canada, and their
respective
territories,
commonwealths and possessions (the “Covered Territory”).
5. Notices.
All notices or other communications that are required or permitted hereunder
will be in writing (“Notices”) and deemed to have been duly given at the
time of receipt if delivered personally or via overnight express, or three
(3)
days after being mailed, registered or certified mail, postage prepaid, return
receipt requested. Facsimile and electronic mail transmissions will not
constitute valid Notices hereunder (whether or not actually received). Notices
will be addressed to the address for Musicloads listed in the introductory
paragraph to this Agreement marked to the attention of Xxxx Xxxxxxxx, or to
such
other address(es) as Musicloads hereafter may designate from time to time in
writing. In addition, on or before the Effective Date, Musicloads will supply
to
Universal tire name, address and telephone numberof a contact person for
Takedown Notices under Section 6 of the Standard Terms (the “Takedown Notice
Contact”). The Takedown Notice Contact will be available at all times during
the Terms (24 hours a day, 7 days a week) such that Musicloads is able to comply
fully with Musicloads’s twenty-four (24) hour removal obligation, as described
in Section 6 of the Standard Terms. Notwithstanding anything in this Section
5
to the contrary, Notices supplied in connection with Section 6 of the Standard
Terms (“Takedown Notices”) may be provided to the Takedown Notice Contact
by electronic mail transmission, Noticeswill be addressed, as applicable, to
the
addresses for Universal listed on Exhibit C hereto, or to such other address(es)
as Universal hereafter may designate from time to time in writing.
6. Additional
Terms and Conditions. Additional terms, conditions, restrictions and
limitations are included in the Standard Terms and the other exhibits and
attachments hereto (as may be revised from time to time during the
Term).
*****
This
Agreement is binding on the Parties immediately upon execution by Musicloads
and
Universal. Neither Party has entered into this Agreement in reliance upon a
representation, warranty or undertaking of the other Party that is not set
out
or referred to in the Agreement.
Mohen,
Inc.
UMG Recordings, Inc.
By:
/s/ Xxxxxx X.
Xxxxx By: __
Name:
[written] Xxxxxx X. Xxxxx
Title:
[written] Chairman