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Exhibit 10.12
XXXXXXX.XXX CORPORATION
000 Xxxxxx Xxxxxx Xxxxx, Xxxxx 000
Tel. (000) 000-0000
Fax. (000) 000-0000
LICENSE AGREEMENT
as of December 7, 1999
Maranatha! Music
00000 Xxxxxx Xxxxx Xxxx
Xxx Xxxx Xxxxxxxxxx
Xxxxxxxxxx 00000
Dear Gentlepersons:
When signed by Maranatha! Music ("Publisher") and Xxxxxxx.xxx Corporation
("Xxxxxxx.xxx"), the following will constitute our agreement:
1. Publisher grants Xxxxxxx.xxx the non-exclusive right to promote,
sell, license pursuant an end-user license agreement, and distribute digital
editions of the copyrighted musical composition(s) described in Schedule "A"
("Compositions") via Xxxxxxx.xxx's digital music distribution system including
the Internet website currently located at xxx.xxxxxxx.xxx (said distribution
system and web site hereinafter "Xxxxxxx.xxx web site").
- CONTENT: Publisher shall provide Xxxxxxx.xxx with copies of the
Compositions for conversion by Xxxxxxx.xxx into the Solero
digital music format ("Solero Editions") and distribution via the
Xxxxxxx.xxx web site. Publisher shall also supply any cover art
associated with the Composition.
- FORMAT: Each Solero Edition shall include appropriate copyright
information supplied by Publisher, and Xxxxxxx.xxx shall include
such copyright information as a part of each download.
- WEBSITE DISPLAY: Xxxxxxx.xxx shall display the Solero Editions
through Xxxxxxx.xxx's web site which may display and use
Publisher's trademarks, service marks and any and all appropriate
artwork associated with the Composition. Links to the Solero
Editions will be provided to Publisher for use and display on
Publisher's web site. A link to Publisher's web site will be
provided from the Xxxxxxx.xxx web site. In connection with the
sale, license and exploitation of the Solero Editions, Publisher
grants Xxxxxxx.xxx the non-exclusive right to use and publish the
cover art as well as the names,
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likenesses and photographs of the composers and artists
associated with the Compositions together with any other sales
and promotional materials which Publisher may provide to
Xxxxxxx.xxx for such use.
- FILE USAGE: Xxxxxxx.xxx's current digital distribution method
makes use of Solero Editions which use the Solero(R) Viewer. This
Agreement grants Xxxxxxx.xxx all necessary rights to use,
distribute and license the Solero Editions to end-users for use
with the Solero Viewer, including the song preview, display,
print and play features of the Solero Viewer. Xxxxxxx.xxx may,
based on anticipated sales for specific Compositions, make the
specific Compositions available in a graphics only format, a
graphics with playback format, or both. Xxxxxxx.xxx shall have
the right to provide preview samples of the Solero Editions free
of charge through download, on CDs, or through audio streaming.
Solero Editions shall be distributed using Xxxxxxx.xxx
proprietary e-commerce and encryption technology. Use of the
Solero Editions is subject to the end-user license agreement
included in the Solero Viewer as amended from time to time.
2. The territory applicable to this Agreement shall be the World (the
"Territory").
3. Xxxxxxx.xxx shall pay Publisher a royalty for music sold according
to the following formula:
A royalty equal to (a) sixty percent (60%) based on the amount of Net Receipts
for sales of licenses for Solero Editions originating directly from referral
links on the Publisher web site, or (b) fifty percent (50%) based on the amount
of Xxxxxxx.xxx's Net Receipts from sales made from Xxxxxxx.xxx (or other
Xxxxxxx.xxx internet sites) or from referrals from third parties who agree to
link to the Xxxxxxx.xxx web site ("Associates"). As used herein, the term "Net
Receipts" means the gross amount of monies actually received by Xxxxxxx.xxx, or
credited to Xxxxxxx.xxx's account, in respect of sales of the Solero Editions,
less any taxes, discounts, Associate' Fees, credit card and other transaction
fees and/or credits. No royalty shall be payable for promotional units
distributed free of charge. The foregoing royalties include all payments to be
made to writer(s) and/or Publisher(s) and/or arranger(s) (other than arranger(s)
engaged by Xxxxxxx.xxx) of the Solero Editions, and/or any other person or
entity, for which payments Xxxxxxx.xxx shall not be responsible. The Solero
Viewer end user license agreement provides that the converted Compositions are
licensed for non-commercial use and do not include public performance rights.
The royalties set forth in this Section 3 shall be the only amounts payable to
Publisher for exercise of the rights granted in this Agreement.
4. Xxxxxxx.xxx shall remain the owner of the digital files subject to
Publisher's ownership of the copyright in the underlying Compositions.
"Composition" for purposes of this Paragraph 4 shall mean the words and music
only and shall not include the digital files or file format or any software,
code or other material or information provided by
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Xxxxxxx.xxx to convert the music into the Solero format for digital
distribution, all of which shall remain the property of Xxxxxxx.xxx.
5. The costs to convert the Compositions into the Solero Editions
shall allocated as provided in Schedule "B."
6. The rights hereunder granted shall continue for a term of five (5)
years commencing on the date hereof. Thereafter, the rights granted shall
continue on a yearly basis until such time as either Party, by written notice,
notifies the other Party upon ninety (90) days notice that such rights hereunder
are terminated effective as of the anniversary of this Agreement.
7. Xxxxxxx.xxx shall render accountings to Publisher quarterly, within
forty-five (45) days following the end of each quarter, accompanied by
appropriate remittances for all sums shown to be due thereunder. Publisher shall
have the right, at Publisher's sole cost and expense, upon thirty (30) days
prior written notice, and not more than once during each calendar year, to cause
an independent CPA or publisher designated representative to conduct an audit at
Sunhawk's office during normal business hours of Sunhawk's books and records
with respect to the Solero Editions of the Compositions. Each accounting
statement shall be conclusive and binding on Publisher in all respects and
Publisher shall be barred from maintaining or instituting any action or
objection to such accounting statement unless Publisher shall give Xxxxxxx.xxx a
detailed written objection, stating the basis thereof, within the earlier of (i)
thirty six (36) months following the end of the accounting period which is
subject to dispute, or (ii) twelve (12) months following Publisher's audit of
such accounting period.
8. Publisher warrants and represents that Publisher has the full and
unrestricted right to enter this agreement and to grant all of the rights herein
granted to Xxxxxxx.xxx, and that the exercise of such rights by Xxxxxxx.xxx in
accordance with this agreement will not infringe upon the copyright or violate
the property, contractual or other rights of any third party.
Publisher further represents and warrants:
(a) The trademark and tradenames which Publisher uses in association with the
Compositions do not infringe any trademark or tradename.
(b) Unless expressly provided otherwise in writing in Schedule "A" to this
Agreement, Publisher is the sole owner and/or Administrator of the Compositions,
and no rights have been granted, or will be granted in the Compositions which
are inconsistent with the rights granted in this Agreement.
Publisher agrees to indemnify and hold Xxxxxxx.xxx harmless from and
against any and all claims, losses, liabilities, damages, expenses and costs,
including without limitation reasonable attorneys fees and court costs, which
result (i) from a breach of any of the warranties or representations provided by
Publisher herein, and (ii) any claim of
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infringement or violation, or alleged infringement or violation, of any third
party's intellectual property or other rights to the extent the claims arise
from the Compositions and other materials provided by Publisher.
9. Xxxxxxx.xxx warrants and represents that Xxxxxxx.xxx has the full
and unrestricted right to enter this agreement. Xxxxxxx.xxx agrees to indemnify
and hold Publisher harmless from and against any and all claims, losses,
liabilities, damages, expenses and costs, including without limitation
reasonable attorneys fees and court costs, which result from (a) the breach of
any of the warranties or representations provided by Xxxxxxx.xxx herein; (b) any
claim of infringement or violation, or alleged infringement or violation, of any
third party's intellectual property or other rights to the extent the claims
arise from materials owned or provided by Xxxxxxx.xxx.
10. Each Party's duty to indemnify shall be conditioned upon receiving
prompt notice of the claim. The indemnifying Party shall have the right to
select counsel and control the defense or settlement thereof provided further
that the other Party shall have to participate at its own expense with counsel
of its choosing. Neither Party shall agree to a settlement of the action without
the other Party's written consent.
11. Nothing contained herein is intended to constitute a partnership
or joint venture between the parties hereto, it being understood that the
relationship between Publisher and Xxxxxxx.xxx shall be that of independent
contractors.
12. In addition to copyright notices provided by Publisher,
Xxxxxxx.xxx shall include the Publisher trademark and the following special
notice on the cover page on each Solero Editions:
NOTICE: Purchasers of a license to 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). 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.
13. Except as provided in the Indemnification Sections 9 and 10 above,
and except in the case of the willful infringement of copyright, trade secret,
trademark or any other intellectual property rights, neither Party shall be
liable to the other Party for any incidental, consequential, special, or
punitive damages of any kind or nature, including, without limitation, the
breach of this Agreement or any termination of this Agreement, whether such
liability is asserted on the basis of contract, tort (including negligence or
strict liability), or otherwise, even if either party has warned or been warned
of the possibility of any such loss or damage.
14. This agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and assigns.
Specifically, the rights and obligations set forth in this Agreement shall
continue with respect to the Compositions notwithstanding any sale, assignment,
licensing or other transfer of rights in the Compositions by Publisher. This is
the entire agreement between Xxxxxxx.xxx and
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Publisher and may only be modified by an agreement in writing signed by
Xxxxxxx.xxx and Publisher. This agreement shall be deemed to have been entered
into, and shall be interpreted in accordance with the laws of California. The
Parties agree to submit any dispute arising from this Agreement to binding
Arbitration in Orange County, California under the rules of the American
Arbitration Association, provided that either party may bring an action for
injunctive relief involving the infringement of intellectual property rights in
Federal Court in Orange County, California.
IN WITNESS WHEREOF, the parties have caused this agreement to be executed as of
the date and year first written above.
AGREED TO AND ACCEPTED:
XXXXXXX.XXX CORPORATION MARANATHA! MUSIC
/s/ XXXXXX XXXXX /s/ XXXXX XXXXXX
------------------------ -----------------------------------
By: Xxxxxx Xxxxx By: Xxxxx Xxxxxx
its: President and CEO its: VP, GM
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Schedule "A"
COMPOSITIONS
Except as otherwise provided in this Schedule "A", all compositions in
Publisher's sheet music catalogs as of the execution of this Agreement as well
as any new Compositions which are added to Publisher's sheet music catalogs
during the term of this Agreement for which Publisher has the necessary rights
to grant Xxxxxxx.xxx the rights set forth in this Agreement. Publisher shall
have the right, in its reasonable discretion, to exclude specific compositions
from this agreement. Publisher agrees to identify said excluded compositions at
the time Compositions are designated as List "A" or List "B" Compositions.
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Schedule "B"
CONVERSION COSTS
1) "A" List Compositions. Xxxxxxx.xxx will absorb the costs of converting the
"A" List Compositions set forth in the attached schedule. Based upon
anticipated sales, Xxxxxxx.xxx may convert a Composition into a graphics
only format, a graphics with playback format, or both. Additional
Compositions may be added to this list from time to time upon written
notice by Xxxxxxx.xxx.
2) "B" List Compositions. Xxxxxxx.xxx will absorb the costs of converting "B"
List Compositions provided that the total royalty payable to Publisher on
Net Receipts shall be reduced by 50% until Xxxxxxx.xxx has recouped its
actual conversion costs for the Composition, said costs not to exceed
$20.00 per page. Publisher and Xxxxxxx.xxx shall mutually agree from time
to time as to which of the Compositions will be converted as "B" List
Compositions and whether the Compositions shall be converted into a
graphics only format, a graphics with playback format, or both. Said
Compositions shall be added by way of amendments to this Agreement, signed
by both parties.
Once identified as a List "A" or "B" List Title, Xxxxxxx.xxx will begin
converting Compositions upon receipt of copies of printed copies of the pieces
and appropriate copyright notices.
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"A" List Compositions
