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EXHIBIT 10.2
TO
XXXXXXX.XXX CORPORATION
FORM SB-2
"[*]" = confidential information omitted and filed separately with the
Securities and Exchange Commission pursuant to a request for confidential
treatment.
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EXHIBIT 10.2
WARNER BROS. PUBLICATIONS U.S. INC.
00000 X.X. 00xx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Dated: May 18, 0000
XXXXXXX XXXXXXXXXXX
000 Xxxxx Xxxxxx Xxxxx
Xxxxxxx, XX 00000
Gentlepersons:
The following, when signed by you and by us, will constitute the agreement
pursuant to which we have granted you a nonexclusive license to distribute
copies of printed editions included in our catalog from time to time (but, in
each instance, only for such periods of time as we ourselves have the right to
distribute such editions) ("EDITIONS") via your internet website (currently
located at "XXXX://XXX.XXXXXXX.XXX")(the "WEBSITE"):
1. TERM:
1.1. The Term of this Agreement shall be deemed to have commenced as of
the above date and shall continue in effect to and including December 31, 2007
(subject to possible earlier termination as provided below.)
1.2. Such Term shall be subject to early termination at our election by
notice to you upon the occurrence of any of the following events of default:
1.2.1. The voluntary filing by you of any bankruptcy or insolvency
proceeding, or the filing of bankruptcy or insolvency proceedings against you,
or any other creditors' proceedings seeking control of your stock and/or assets,
which are not dismissed within one hundred twenty (120) days thereafter;
1.2.2. Your failure to account to us and/or to pay us amounts due
hereunder which failure is not cured within ten (10) business days following
your receipt of notice from us demanding the same;
1.2.3. Any other breach of this Agreement not cured by you in the
manner prescribed in Paragraph 11.2, below; or
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1.2.4. In the event that Xxxxxx Xxxxx and Xxxxx Xxxxx shall no
longer be actively in charge of the day to day operations of your company, it
being understood and agreed that notice of termination pursuant to this
Paragraph 1.2.4 must be given within six (6) months following our receipt of
notice that both Messrs. Xxxxx and Xxxxx are no longer actively in charge of
such day to day operations (provided that the latter notice shall have been
given to us within ten [10] days following the first day upon which neither Xx.
Xxxxx nor Xx. Xxxxx is actively in charge).
2. TERRITORY:
The Territory covered by this Agreement shall be the world, provided,
however, that in any instance in which our print and/or digital/internet rights
with respect to a specific Edition and/or any composition(s) contained therein
are less than worldwide, your rights hereunder shall be limited to those
territories in respect of which we have the right to distribute such Edition
and/or component composition(s).
3. GRANT OF RIGHTS/RESTRICTIONS/PROCEDURES/COSTS OF CONVERSION
AND OPERATION:
3.1. Grant of Rights/Restrictions:
3.1.1. Subject in each instance to (1) possible territorial
limitations as provided in Paragraph 2, above, (2) any and all requirements
and/or restrictions as to time, content, and the manner of distribution
contained in the agreements through which the rights granted to you hereunder
have been or may hereafter be derived, and (3) our prior written consent (which
consent shall not be unreasonably withheld) as to each and every specific
Edition, you shall have the nonexclusive right to advertise, promote and sell or
electronically distribute Editions solely via the Website within the Territory
during the Term (as well as the right after the Term to fulfill orders placed
during the Term but not fulfilled prior to the expiration of the Term.)
3.1.2. In each instance in which we give our written consent
pursuant to Paragraph 3.1.1, above, we shall inform you as to any time, content
and/or manner restrictions applicable to the Edition(s) covered by the consent.
In addition, in any instance in which we lose our rights with respect to a
specific Edition, or our rights with respect to such Edition are further
limited, we shall so notify you.
3.2. Distribution Methods and Procedures:
3.2.1. At your election, you may distribute the Editions on (i) a
"HARD COPY FULFILLMENT" basis (i.e., where consumers order hard copies from you
via the Website, you
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forward such orders to us, and we fulfill such orders), the procedure for which
is described in Paragraph 5.3, below, or (ii) on an "electronic distribution"
basis (i.e., where consumers download their copies directly from the Website.)
3.2.2. Preparation For Electronic Distribution; Disposition of
Electronic Files; Post-Term Uses:
(A) We will establish a procedure under which we will supply
you with an approved text of and, in the event (and to the extent) that we elect
to prepare the same, an electronic version with information concerning the
coding of, each Edition to be distributed by you hereunder. In addition, we
shall provide editorial/marketing advice to you to assist you to select and
prioritize Editions to be distributed hereunder.
(B) You shall have the right to convert Editions approved by
us into electronic formats suitable for electronic distribution;
(C) The entire cost of such conversion shall be borne by
you, including, but not limited to, translating and electronic coding of each
Edition.
(D) At the end of the Term (whether by expiration or by
early termination), you shall immediately discontinue all distribution
activities with respect to Editions (except for the completion of transactions
commenced prior to such termination), and remove all electronic file copies of
Editions from the Website file server(s).
(E) Within ten (10) days thereafter, you shall deliver to us
electronic copies of all files of Edition(s) so converted by you, together with
an affidavit sworn to by a responsible corporate officer attesting to your
discontinuance of all distribution activities with respect to the Editions and
your removal of all electronic file copies of Editions from the Website file
server(s), it being understood and agreed that you may retain archival copies of
Editions previously distributed by you hereunder. However, in the event that
such termination is pursuant to Paragraph 1.2.4, above, such archival copies
shall be destroyed and we shall be provided with an affidavit sworn to by a
responsible corporate officer attesting to such destruction.
(F) We understand and agree that such electronic files may
incorporate technological elements which are proprietary in nature (whether or
not the same have been covered by patent(s), trademark(s), trade secrets or
other statutory protection(s)), that as between you and us, such technological
elements are and will remain your property (unless, and to the extent that, such
technological elements become public domain), and that (if and to the extent
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that you notify us thereof at or prior to the time of delivery of the electronic
file copies described above) we shall not utilize such technological elements
thereafter except pursuant to a written agreement between you and us, [*].
3.2.3. Separate Sub-Page:
(A) You shall develop and maintain at all times during the
Term a separate sub-page within the Website entitled MUSIC FROM WARNER BROS.
PUBLICATIONS, (the "SUB-PAGE") which shall be utilized solely for the purposes
of this Agreement.
(B) The Sub-Page shall be designed by you and such design
and any subsequent modifications thereto shall be subject in each instance to
our prior written approval, which may be obtained by you via fax (and shall be
deemed to have been given in any instance in which we do not disapprove via fax
within five (5) business days following our receipt of the material for which
approval is sought).
(C) The Sub-Page shall include such trademarks, service
marks, and artwork as may be specified by us by notice to you, or approved in
writing by us, from time to time, and shall be made available for our and
Warner/Xxxxxxxx Music, Inc.'s use as a linking page to our and/or their
website(s).
3.2.4. Electronic distribution shall be under such publisher
imprints as we shall specifically designate by notice to you in each instance,
it being understood and agreed that each electronically distributed Edition
shall be formatted to include such trademarks and/or copyright notices as we may
specify from time to time, so that such information is made part of each
electronic distribution.
3.2.5. Each Edition which is made available for electronic
distribution shall be offered only in such specific format(s) as we shall
supply, and, unless we specifically notify you to the contrary, the downloadable
file of each such Edition shall include a playback feature which incorporates a
midi file arrangement based solely upon the musical content of the subject
Edition.
3.3. All costs of operating and maintaining the Website (including the
Sub-Page), and all costs of distribution, advertising, marketing, promotion and
sale of Editions by you shall be borne by you.
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4. LINKS:
4.1. You will assist us in the establishment of a reasonable number of
site-to-site Internet LINKS FROM other websites to the Website, including, but
not limited to, links from music dealers, various Warner Music Group websites,
and, specifically (and without limiting the generality of the foregoing) from
the websites of Warner/Xxxxxxxx Music, Inc. ("WCMI") and/or us.
4.2. We and WCMI will provide (and maintain at all times during the Term
of this Agreement) highly visible banner ad and song links from all present
and/or future websites controlled by either or both of us, including, but not
limited to, xxx.xxxxxxxxxxxxx.xxx, and we shall use best efforts to obtain the
same ads and links on xxx.xxxxxxxxxx.xxx. Such banner ad and song links will be
at least as prominent as the banner and song links provided by WCMI or us to
other distributors of Editions, if any, publicized on any present and/or future
websites controlled by WCMI and/or us.
4.3. You will also provide (and maintain at all times during the Term of
this Agreement) links from your present and/or future website(s) to all websites
referred to in Paragraph 4.2, above.
5. ROYALTIES:
5.1. Electronic Distribution of Editions:
5.1.1. In consideration of the foregoing, you hereby agree to pay
us [*] ([*]) of your "GROSS RECEIPTS" (as defined in Paragraph
5.4.1, below) from the electronic distribution of Editions.
5.1.2. [*]
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5.2. [*]
[*]
5.3. Hard Copy Fulfillment:
5.3.1. With respect to hard copy fulfillment, orders shall be
received by you and the sale/credit card transaction shall be completed by you.
Such order shall then be transmitted to us for fulfillment and we shall credit
your account with a distribution fee equal to [*] ([*]) of the retail
selling price of each copy sold, paid for and not returned.
5.3.2. It is understood and agreed that in the event that you
forward a hard-copy order to us and we do not then have the item(s) ordered in
stock, you will first authorize the purchase utilizing the prospective buyer's
credit card, and you will settle the sale and complete the credit transaction
after we fulfill the order (and notify you thereof).
5.4. Definitions:
5.4.1. "GROSS RECEIPTS":
(A) "GROSS RECEIPTS" means the gross amount of monies
actually received by you, or credited to your account, in respect of electronic
distribution of Editions, less any taxes, discounts, [*] credit card
transaction fees and/or credits actually paid or borne by you. (In the context
of this Paragraph 5.4.1, "you" shall include any parent, subsidiary or
affiliated entity or any other person, firm or corporation directly or
indirectly controlled by you which receives monies on your behalf by reason of
the electronic distribution of Editions via the Website.) [*]
(B) [*]
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5.4.2. [*]
- [*]
- [*]
- [*]
- [*]
- [*]
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6. FUTURE STOCK ISSUANCE/REGISTRATION RIGHTS/DIRECTORSHIP:
6.1. In consideration of the covenants and agreements undertaken by us
hereunder, you agree to issue to us [*] unregistered shares of Common Stock
(the "SHARES"), as adjusted from time to time in the event of any stock split,
stock dividend, or similar recapitalization, upon the closing of a firmly
underwritten public offering of Common Stock, or the private sale (or other
disposition) of [*]% or more of the Common Stock then authorized and
outstanding. You warrant and represent that 20,000,000 shares of Common Stock
are authorized, and that of such shares 3,739,894 are presently issued and
outstanding.
6.2. We acknowledge that the Shares will not be registered under the
Securities Act of 1933, as amended (the "ACT"), or applicable state securities
laws. We further acknowledge that we will be required to bear the economic risks
of our investment in the Shares for an indefinite period of time because we will
be unable to sell, transfer or assign the Shares except in compliance with the
registration provisions of the Act and applicable state securities laws, or with
an opinion of counsel reasonably satisfactory to you that registration under the
Act and applicable state securities laws is not required for lawful disposition
of the Shares. We consent to the placement of a legend on the certificates for
the Shares indicating our investment intent and the restrictions on transfer of
the Shares, and also to the placement of a "stop transfer" order on your stock
transfer books until such time as the Shares may be lawfully resold or
distributed.
6.3. If you receive a written request from us, at any time after the
later of (i) the expiration of any "lock-up" period or (ii) 180 days following
the closing of a firmly underwritten public offering of Common Stock, that you
register all or a part of the Shares for resale to us, then you will, as soon as
practicable, use your best efforts to effect such registration as would permit
or facilitate the sale and distribution of all or such portion of the Shares as
are specified in our request. We agree to furnish you with such information,
including information relating to our plan of distribution of the Shares, as you
may request by written notice to us, and to enter into customary indemnification
covenants with you, in connection with such registration.
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6.3.1. If your Board of Directors determines in good faith that
such registration would be seriously detrimental to you and that it is essential
to defer the filing of such registration statement, then you shall have the
right to defer such filing for a period of not more than 180 days after the
receipt of the request from us, provided that you shall not defer your
obligation in this manner more than twice in any twelve-month period.
6.3.2. You shall not be obligated to effect, or to take any action
to effect, any registration pursuant to para. 6.3 after you have initiated two
such registrations.
6.4. Xxxxx Xxxxx and Xxxxxx Xxxxx will vote (or cause to be voted) their
shares of Common Stock (as well as the shares of Common Stock held by any person
owned or controlled, directly or indirectly, by either or both of Messrs. Xxxxx
and Xxxxx) for the election of an individual to be designated by us as a nominee
to your Board of Directors at each election of directors held while we own
shares representing at least two percent (2%) of the outstanding Common Stock.
It is understood and agreed that we will be entitled to nominate one person to
serve as a member of your Board of Directors at any given time, irrespective of
whether you implement a staggered Board or if, for any other reason, there is an
election of directors during our nominee's tenure in office. By their signatures
below, Messrs. Xxxxx and Xxxxx accept the obligations of the para. 6.3.1 insofar
as the same apply to shares directly or indirectly owned or controlled by either
or both of them.
7. ACCOUNTING AND PAYMENT/AUDIT/SUIT:
7.1. You shall keep true and accurate books of account concerning
transactions under this Agreement, and you shall deliver an accounting statement
(plus the appropriate payment of royalties) to us, within forty-five (45) days
following the end of each calendar quarter. To the extent that we are paid by
you, we shall in turn account to and pay all third parties from or through whom
the rights granted to you hereunder are derived (as well as arrangers and/or
adaptors engaged by us in the preparation of Editions, but excluding such
personnel engaged by you).
7.2. We shall keep true and accurate books of account concerning sales
by us pursuant to hard copy fulfillment orders referred by you to us pursuant to
Paragraph 5.3, and we shall deliver an accounting statement (plus the
appropriate payment of distribution fees) to you, within forty-five (45) days
following the end of each calendar quarter.
7.3. Each party shall have the right, at such party's sole cost and
expense, to examine the other party's books of account concerning transactions
pursuant to this Agreement. Each
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statement (and the accounting period to which such statement relates) shall be
open to inspection for three (3) years following the date when such statement is
received by such party. Such inspection shall take place at the examined party's
principal place of business during normal business hours upon at least thirty
(30) days' notice, not more than once during each calendar year (although a
specific inspection may involve more than one visit.)
7.4. Legal action with respect to a specific statement and/or the
accounting period to which such statement relates shall be forever barred if not
commenced in a court of competent jurisdiction within the earlier of (1)
thirty-six (36) months following the receipt of such statement or (2) twelve
(12) months following the examined party's receipt of the audit report for such
accounting period.
7.5. For the purposes of this Paragraph 7, a statement shall be deemed
to have been received when due unless the party to whom such accounting is
rendered gives notice of nonreceipt within sixty (60) days following the due
date thereof (in which event the time limitations prescribed above shall be
deemed to run from the date of actual receipt of such statement.)
8. ARRANGEMENTS/ADAPTATIONS:
8.1. Any arrangement(s) and/or adaptation(s) of compositions included in
Editions created by you or on your behalf shall be created under your
supervision on a "work for hire" basis, at your sole cost and expense. However,
from inception, the same shall belong to us, subject only to your right to use
the same for the purposes of this Agreement.
8.2. In each instance, promptly upon completion thereof, you shall
assign to us all rights in the copyright therein, throughout the world,
inclusive of copyright in the electronic file thereof, together with the right
to register such copyright in our name as the "author" or to assign such right
to such third party or parties as we may choose.
8.3. In any instance in which you fail to deliver the appropriate
assignment to us, we shall have the right to execute the same in your name and
on your behalf as your attorney-in-fact (which appointment is coupled with an
interest and is therefore irrevocable) and to register the same with the U.S.
Copyright Office and any other governmental agencies throughout the world as we
may select.
9. SPECIAL NOTICE:
In addition to the notice requirements set forth in Paragraph 3.2.3 (C),
above, you shall include the
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following special notice in A PROMINENT TYPEFACE READILY READABLE WITH THE NAKED
EYE on each copy of each electronically distributed Edition:
"NOTICE: Purchasers of this musical file are entitled to use it for
their personal enjoyment and musical fulfillment. However, any
duplication, adaptation, arranging and/or transmission of this
copyrighted music requires the written consent of the copyright owner(s)
and of WARNER BROS. PUBLICATIONS, INC. Unauthorized uses are
infringements of the copyright laws of the United States and other
countries and may subject the user to civil and/or criminal penalties."
10. WARRANTIES AND REPRESENTATIONS:
10.1 Each party warrants and represents to the other that such party has
full right, power and authority to enter into and to perform its obligations
pursuant to this Agreement in accordance with its terms.
10.2. In each instance in which (and to the extent to which) we grant
you the right to electronically distribute an Edition, such grant shall
constitute a warranty and representation on our part that your exercise of the
rights so granted to you in compliance with the terms and conditions set forth
above shall not violate applicable law and shall not infringe upon the rights of
any third party, whether contractual in nature or whether based upon other
rights, including but not limited to those relating to copyright, trademark,
service xxxx, or rights of privacy and/or publicity.
10.3. Your use on the Website of any material(s) not provided to you by
us shall constitute a warranty and representation on your part that you own or
control sufficient rights therein to permit such use thereof and that such use
shall not violate applicable law and shall not infringe upon the rights of any
third party, whether contractual in nature or whether based upon other rights,
including but not limited to those relating to copyright, trademark, service
xxxx or rights of privacy and/or publicity.
11. INDEMNITIES; CURE OF BREACHES; WAIVER:
11.1. Indemnity:
11.1.1. Each party will indemnify the other, and hold the other
harmless, against any loss or damage (including court costs and reasonable
attorneys' fees) due to a breach of this agreement by that party which results
in a judgment against the other party or which is settled with the indemnifying
party's prior written consent (not to be unreasonably withheld).
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11.1.2. Each party (the "DEFENDING PARTY") will provide a defense
on behalf of the other party in the event of any claim, demand, or litigation
arising from or related to the breach (or alleged breach) of the Defending
Party's representations and warranties hereunder or otherwise relating to such
party's obligations under this Agreement.
11.1.3. Each party shall at all times maintain in force a policy
of errors-and-omissions insurance, issued by a carrier licensed to do business
in New York, California, Tennessee and Florida, having policy limits of at least
[*] Dollars ([*]) for a single claim and [*] Dollars ([*]) for all claims
thereunder, which policy shall name the other party as an additional insured and
which shall require at least thirty (30) days' advance notice of cancellation to
the other party. Certificates of such coverage shall be provided by each party
to the other party promptly following execution of this Agreement.
11.1.4. Each party shall give the other party prompt notice of any
third party claim, action or proceeding in respect of which indemnity is sought
and the other party shall make a good faith effort to consult with the notifying
party prior to responding to such claim, action or proceeding.
11.1.5. Each party is entitied to be notified of all proceedings
in any action in respect of which such party is the indemnitee, and to
participate in the defense thereof by counsel selected by such party, at such
party's sole cost and expense.
11.2. Cure of Breaches:
11.2.1. Neither party will be deemed in breach unless the other
party gives notice and the notified party fails to cure within 30 days (10
business days, in the case of a payment of money or the rendition of an
accounting statement) after receiving notice; provided, that if the alleged
breach does not involve a payment of money and/or the rendition of an accounting
statement and is of such a nature that it cannot be completely cured within 30
days, the notified party will not be deemed to be in breach if the notified
party commences the curing of the alleged breach within such 30-day period and
proceeds to complete the curing thereof with due diligence within a reasonable
time thereafter.
11.2.2. However, either party shall have the right to seek
injunctive relief to prevent a threatened breach of this agreement by the other
party.
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11.3. Waiver:
The waiver of the applicability of any provision of this Agreement
or of any default hereunder in a specific instance shall not affect the waiving
party's rights thereafter to enforce such provision or to exercise any right or
remedy in the event of any other default, whether or not similar.
12. CONFIDENTIALITY/NONDISCLOSURE:
12.1. In the course of performing this Agreement, one party may disclose
information to the other concerning its inventions, know-how, trade secrets and
proprietary information ("CONFIDENTIAL INFORMATION") as may be necessary to
further the purposes of this Agreement. All such Confidential Information
disclosed hereunder shall remain the sole property of the party disclosing such
information and the other party shall have no interest in or rights with respect
thereto. Each party agrees not to (i) use Confidential Information disclosed by
the other party or (ii) to disclose such Confidential Information to any of its
employees or agents or any third party, except for such persons who have a bona
fide need for such information to effect the purposes of this Agreement, without
the disclosing party's prior written consent. Each party will take all
reasonable precautions to prevent an unauthorized disclosure of such
Confidential Information, including at a minimum exercising the same degree of
care and taking the same precautions that such party exercises and takes with
regard to protection of its own most confidential information.
12.2. Neither party hereto shall disclose the terms and conditions of
this Agreement to any third party (other than such party's attorney's and/or
accountants), and shall take reasonable steps to ensure that its employees,
affiliates, and agents do not disclose the terms and conditions of this
Agreement to any third party, without the prior written consent of the other
party, except to the extent that such disclosure is made to such party's
attorneys and/or accountants or is otherwise compelled in connection with
litigation proceedings.
12.3. The obligations set forth in this Section 12 will survive the Term
of this Agreement.
13. NOTICES/STATEMENTS/CONSENTS:
13.1. Notices shall be sent by certified (return receipt requested),
registered mail, Federal Express or Airborne Express, or any other means by
which delivery may be verified, to you and to us at the addresses set forth
above, or to such other addresses as the parties may designate from time to time
by notice in like manner.
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13.2. Statements (and payments, if applicable) shall be sent by ordinary
mail to the parties' respective addresses for notice.
13.3. Approval/Consent:
Where the consent or approval of a party is required, it shall not
be unreasonably withheld (unless expressly provided otherwise herein) and shall
he deemed given unless the party whose consent or approval has been requested
delivers notice of nonconsent or disapproval to the other party within 15 days
after receipt of notice requesting such consent or disapproval.
14. LAW AND FORUM:
14.1. This Agreement has been entered into in and is to be interpreted
in accordance with the laws of, the State of Florida. All actions or proceedings
seeking the interpretation and/or enforcement of this Agreement shall be brought
only in the State or Federal Courts located in Miami-Dade County, all parties
hereby submitting themselves to the jurisdiction of such courts for such
purpose.
14.2. Service of Process:
14.2.1. Service of process in any action between the parties may
be made by registered or certified mail addressed to the parties' then-current
addresses for notice as prescribed in Paragraph 13, above.
14.2.2. Service shall become effective thirty (30) days following
the date of receipt by the party served (unless delivery is refused, in which
event service shall become effective thirty [30] days following the date of such
refusal).
15. MISCELLANEOUS:
15.1. This Agreement contains the entire agreement between the parties
concerning the subject matter, and replaces and supersedes any and all prior
agreements, written and/or oral.
15.2. This Agreement may not be modified or amended except by a further
written agreement signed by both parties.
15.3. The parties are independent contractors, and nothing contained
herein shall constitute either party the agent of, or a partner, joint venture
or co-venturer with, the other party.
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Neither party shall hold itself out to any third party as authorized to enter
into binding commitments on behalf of the other.
15.4. Personal Nature of Agreement; Assignment:
15.4.1. This Agreement shall be binding upon, and shall inure to
the benefit of, the parties and their respective successors and assigns.
However, this Agreement is personal to the parties, and neither party may assign
this Agreement in whole or part except to a parent or subsidiary corporation of
the assignor or to a purchaser of substantially all of the assignor's stock or
assets which is then actively engaged on a regular basis in the same business as
the assignor.
15.4.2. No such assignment shall relieve the assignor of any
liability hereunder, and no such assignment shall become effective unless the
assignee shall deliver to the other party the assignee's written assumption of
the performance of the assignor's obligations hereunder (and the responsibility
for the assignor's warranties and representations hereunder) for all periods
following the effective date of such assignment.
15.5. The paragraph headings included in this Agreement are included for
the convenience of the parties, and neither add to nor detract from the
provisions of said paragraphs.
Very truly yours,
WARNER BROS. PUBLICATIONS U.S. INC.
By: /s/ XXXX X. XXXXX
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Xxxx X. Xxxxx - President
Chief Operating Officer &
Chief Financial Officer
AGREED AND ACCEPTED:
SUNHAWK CORPORATION
By: /s/ XXXXXX X. XXXXX
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Xxxxxx Xxxxx
Chairman
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The undersigned hereby accepts the obligations described in para. 4.2 of the
Agreement.
WARNER/XXXXXXXX MUSIC, INC.
By: /s/ XXXXXX X. XXXXXXXXX
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Xxxxxx X. Xxxxxxxxx
Executive Vice President
Business Affairs
The undersigned hereby accept the obligations described in Paragraph 6.4 of the
within Agreement.
/s/ XXXXXX X. XXXXX
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XXXXXX XXXXX
/s/ Xxxxx Xxxxx
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XXXXX XXXXX
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AMENDMENT TO AGREEMENT
("EPS" FILE CONVERSION)
This is an amendment to the agreement which was made as of May 18, 1998
("Agreement") by and between Warner Bros. Publications U.S. Inc. ("Warner") and
Sunhawk Corporation ("SUNHAWK").
Warner wishes to convert the Edition entitled "Rhapsody in Blue" into the
Solero(TM) format, and may from time to time request that Sunhawk convert other
specific Editions into the Solero format.
Sunhawk wishes to convert "Rhapsody in Blue" into the Solero format and
distribute it in accordance with the terms of the Agreement.
The parties therefore amend the Agreement to effective October 20, 1998 as
follows:
1. From time to time Warner may request that Sunhawk convert a specific Edition
into the Solero format.
2. If Sunhawk agrees to produce the conversion, Warner will provide Sunhawk with
encapsulated postscript (EPS) files for each page of the Edition to be
converted.
3. Upon receipt of the files, Sunhawk shall convert the files into the Solero
format as soon as reasonably possible (or other mutually agreed-upon date).
4. Upon completion of the conversion, Sunhawk shall have the right to distribute
the Edition in accordance with the terms of the Agreement.
5. Warner shall pay Sunhawk [*] per non-playable Solero page (or other mutually
agreed-upon fee).
6. This Section 6 shall apply to the "Rhapsody in Blue" project only.
a. Sunhawk agrees to convert "Rhapsody in Blue" into non-playable Solero
format (approximately 400 pages) at a cost of [*] per page. Upon
completion of the conversion, Sunhawk shall
i. create an index of the converted files in the Solero database
system ("Solero Index)
ii. deliver on a PC CD-ROM (win95, 98 and NT 4.0 compatible) the
converted files, Solero Viewer(TM), and Solero Index(TM) made
from Warner-supplied liner notes and other text which Warner will
provide to Sunhawk in digital form.
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[*] Confidential Treatment Requested
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x. Xxxxxx shall pay the conversion file for "Rhapsody in Blue" upon
execution of this amendment by both parties. If the conversion fee is
not paid within one (1) month of the execution of this amendment,
Sunhawk shall have the right to deduct the fee from amounts which may be
payable to Warner under the Agreement.
c. Sunhawk shall use commercially reasonable efforts to correct any
material program errors in the CD-ROM which Warner brings to Sunhawk's
attention but shall not be responsible for any costs associated with
replacing CD-ROM copies (for warranty claims or otherwise) distributed
by Warner to end users. The Solero Viewer and Solero files are provided
to end users in accordance with the end user license agreement contained
in the Solero Viewer.
7. Each party shall indemnify the other party in accordance with Section 11 of
the Agreement. Specifically, Sunhawk shall indemnify Warner with respect to
claims arising from materials which it creates and provides for the "Rhapsody in
Blue" or any other conversion project. With respect to the "Rhapsody in Blue"
and any other conversion project, Warner shall indemnify Sunhawk with respect to
claims arising from the manufacture and distribution of the CD-ROM as well as
claims which arise from materials which Warner provides for the CD-ROM,
including the underlying music, EPS files, liner notes and any other materials.
Except as provided in this amendment, and except to the extent any term in the
Agreement is inconsistent with the terms of this amendment, all other terms and
conditions of the Agreement shall remain unmodified and are hereby reaffirmed.
IN WITNESS WHEREOF, this amendment is executed as of the Effective Date set
forth above.
Warner Publications U.S. Inc. Sunhawk Corporation
By: [SIGNATURE ILLEGIBLE] By: /s/ XXXXX XXXXX
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XXXXX XXXXX
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Print Name Print Name
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AMENDMENT TO AGREEMENT
("ASSOCIATE(S) PROGRAM/HARD COPY FULFILLMENT")
This is an amendment to the Agreement that was made as of May 18, 1998 (the
"Effective Date") by and between Warner Bros. Publications U.S. Inc. ("Warner")
and Sunhawk Corporation ("Sunhawk").
Whereas the parties wish to amend the terms of the Agreement, it is hereby
amended effective as of January 1, 1999 as follows:
1. Sunhawk shall have the right to enter into agreements to permit
individuals and entities, including WB, to obtain copies of Editions by
directly or indirectly linking their websites to Sunhawk's Digital Distribution
System ("Associate(s)"). "Digital Distribution System" shall mean the Sunhawk
web site currently located at xxxxx.xxxxxxx.xxx.
2. Sunhawk shall have the right to pay Referral Fees to Associate(s)
(including WB) who originate sales from their websites. With respect to the
Editions, Sunhawk shall pay [*] ([*]) based on Associate(s)'s Net Sales. In the
Associate(s) Agreements, "Net Sales" is defined as the amount actually received
by Sunhawk from visitors to the Associate(s)'s site who make purchases of
digital versions of the Editions using the special links to the Digital
Distribution System, excluding amounts collected by us for sales taxes, duties,
shipping, handling and similar charges, amounts due to credit card fraud and
bad debt, credits for returned goods, database processing fees, credit card
validation fees or other charges incurred when processing transactions.
3. The following is hereby added to the end of Section 5.1.1 of the
Agreement:
"For sales made through Associate(s) referrals via the Sunhawk Digital
Distribution System, you shall pay to us an amount equal to [*] ([*])
of your Gross Receipts (as defined in Section 5.4.1, below) from the
electronic distribution of Editions, together with any Referral Fees for
sales of digital versions of the Editions originating from a WB website."
4. Referral Fees shall be payable to Associate(s) on a quarterly basis.
In the case that the Referral Fee does not exceed $400, that quarter's Referral
Fee will be rolled over into the next quarter and added to the subsequent
quarter's Referral Fee and continue to roll over until such time as the
Referral Fee reaches $400 or greater.
5. Sunhawk shall have the right to provide Affiliates with a listing of
the Editions in digital form, including, but not limited to, Title, Artist and
Sunhawk catalog number, from which the Affiliate can link to the Sunhawk
Digital Distribution System.
6. Sunhawk shall be responsible for administering the Associate(s)
program. Before executing an Associate(s) agreement that includes access to
Editions, Sunhawk shall provide WB with the identity of the proposed
Associate(s). Said Associate(s) shall be deemed approved by WB unless Sunhawk
is notified within three (3) days that the Associate(s) is not approved. WB
shall have the right to cancel its approval of any Associate(s) upon thirty (30
days) written notice to Sunhawk.
7. Section 5.3.1 is hereby amended to read: "With respect to hard copy
fulfillment, orders shall be received by you and the sale/credit card
transaction shall be completed by you. Such order shall then be transmitted to
WB who will ship the products ordered to Sunhawk and invoice Sunhawk for the
heard copies at [*] off of list price."
Except as provided in this amendment, and except to the extent any term in the
Agreement is inconsistent with the terms of this amendment, all other terms and
conditions of the Agreement shall remain unmodified and are hereby reaffirmed.
IN WITNESS WHEREOF, this Agreement is executed as of the Effective Date set
forth above.
Warner Bros. Publications U.S. Inc. Sunhawk Corporation
By: /s/ XXXXX X. XXXXX By: /s/ XXXXXX X. XXXXX
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Xxxxx X. Xxxxx, Dir., Business Affairs Xxxxxx X. Xxxxx
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Print Name Print Name
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