ENCODING SERVICES AGREEMENT

 
    
 
Company would like to validate our strong desire to have a strategic and long-term [portion deleted - included in fully 
    licensed version]with ____________.com by delivering what we believe to be a very compelling proposal. The below proposal is intended to encompass all of Customer's encoding for a period of _______ and is designed with a full partnership in mind. Please note that the pricing you are being offered here is confidential to E-music and the terms herein should not be disclosed to any third party.
 
The terms of this agreement are good until the last day of ____________.
 
You will notice in the pricing section that we have given you _______ prices for the encoding of _______ CDs initially and all ongoing volumes for a period of _______.
 
Also pricing for Windows Media encoding has been added here as well at a very reasonable rate.
 
Encoding Requirements
 
Please review this document carefully and let me know if there are sections that are unclear or if we are missing some pressing details.
 
The following are your requirements, as we understand them.
 
    
· Support for the highest quality encoding from _______ format into _______ formats.
· Encoding of _______ CDs into _______ formats, _______. Possible support[portion deleted - included in fully 
    licensed version].
· _______ files will be encoded using the _______.
· _______ samples will be encoded into _______.
· _______ samples will be captured _______ seconds into a song unless [portion deleted - included in fully 
    licensed version]uested. _______.
· Scanning of cover art into at least _______ formats. 
o _______ at a frame size to be determined.
· Receive media from labels and generate an electronic package slip [portion deleted - included in fully 
    licensed version]ectification purposes.
· Tracking of all media that is shipped to Company without a packing slip by our internal tracking number, UOC and album title.
· Data entry for all _______ CDs to be used for meta data entry, namin[portion deleted - included in fully 
    licensed version]reference to web site.
· Deliveries of media back to ____________.com.
· Require dedicated capacity in the Company lab in an ongoing capacity [portion deleted - included in fully 
    licensed version]t can not yield the normal ______ week lead-time.
 
Digitization & Encoding Services; Data Work, and Scanning
 
Encoding
 
Company is in a phase in our company culture where the partnerships we make are [portion deleted - included in fully 
    licensed version] as anything. By this we are prepared to jump into this partnership [portion deleted - included in fully 
    licensed version] feet and offer you the same strategic pricing for your [portion deleted - included in fully 
    licensed version] all ongoing encoding work.
 
Please find below a brief description of the two opportunities available to you.
 
Pricing Short: Please also see contingencies below.
 
Straight customer/client relationship.
 
 Encoding- MP3 and RA  Scanning  Data
 
Initial _______CDs
 
1-year ongoing 
 
 
Earn out opportunity: with the below opportunity [portion deleted - included in fully 
    licensed version]f _______ off the initial encoding project for a _______ royalty on all online[portion deleted - included in fully 
    licensed version]of media we encoded for a period of _______.
 
 Encoding- MP3 and RA  Scanning  Data
 
Initial _______CDs
 
1-year ongoing
 
Initial _______CDs (material):
 
The following are conditions of this very strategic pricing for your initial CDs.
 
· Work order is executed and a PO generated for the initial [portion deleted - included in fully 
    licensed version].
· Jointly Sponsored press release announcing project and partnership
· Minimum annual commitment of _______ CDs for a period of ______ year. This [portion deleted - included in fully 
    licensed version]edicated capacity that will be priority access.
· Link exchange where appropriate
· Possible other promotional or marketing events
· _______ downloads for all Company employees for a period of ______ months.
 
Specifics:
 
Set-up per CD: 
Database integration: 
Material Warehousing
 ______ months from 1st shipment 
Encoding cost per track/song
 _______ file: 
 
 
Total for _______ Tracks: 
_______ tracks per CD on average
 
We will work with you over the next week to put in place a delivery schedule for this [portion deleted - included in fully 
    licensed version]
 
If not executed by _______________ the price of _______ will apply for per track encoding.
 
Data Entry
 
Company has put in place a very robust data entry process and management software. Over [portion deleted - included in fully 
    licensed version]year we have created custom databases for a number of clients with [portion deleted - included in fully 
    licensed version] as your own. The following is our understanding of your data entry requirements [portion deleted - included in fully 
    licensed version]the pricing that we are able to offer to implement these. _______ The [portion deleted - included in fully 
    licensed version]based on our ability to enter data for _______ CDs per hour per data entry e[portion deleted - included in fully 
    licensed version]
 
Please also note that we have looked in the past at the use of the _______ as a [portion deleted - included in fully 
    licensed version]pagating meta fields in our clients databases. _______.
 
Caveat: When Company is given an electronic packing slip for the CDs we are re[portion deleted - included in fully 
    licensed version]ta entry costs associated with those CDs will be _______ per CD.
 
Fields to be captured:
Format for export: 
Cost per CD:  
Total Costs for _______ CDs: 
 
Scans
 
Company has the ability to scan cover art for Customer as part of our normal fulfillment [portion deleted - included in fully 
    licensed version] For this project we will capture _______ formats as follows:
 
Costs per scan: _______
Costs for _______ scans:  _______
 
List price is _______ and _______ additional format.
 
 
We will deliver the image files to you on C[portion deleted - included in fully 
    licensed version] your requirements. S[portion deleted - included in fully 
    licensed version]e have found that it is easier to manage the audio files on CDR depending [portion deleted - included in fully 
    licensed version]age. We will work with you on this.
 
Fulfillment and Delivery
 
    
Fulfillment and delivery is how we return your media to you or to your hosting provider. The [portion deleted - included in fully 
    licensed version]ons here are via DAT, CDR, or FTP. We don't recommend FTP because of timeliness for this amount of data.
 
DLT delivery media for _______ CDs worth of compressed media and cover art.
 
Approximately _______ of data to be delivered
_______ can fit on an individual DLT
_______ needed; @ _______ per DLT
 
Delivery Costs: _______
CDR Delivery: _______
 
We will work with your operations teams to put in place a structure for how we deliver, sto[portion deleted - included in fully 
    licensed version]retrieve media to and for Customer.
 
Summary:
 
We are very interested in working with you on this project. We believe th[portion deleted - included in fully 
    licensed version]choice in the industry that can handle these volumes [portion deleted - included in fully 
    licensed version] let me know what other information you need from me and I will work to provide it. These prices are valid through ________________________.
 
Initial _______ CD encoding project
 
 
 
 
Ongoing Work:
 
Contingent on the signing of this work agreement we will work with ___________ to put in place a structure and a process for handling all mass ongoing encoding work for ___________ as well as how we will reserve dedicated lab time. In signing this document ___________ asserts its willingness to enter into an agreement of this nature.
 
The following is the pricing that we are able to offer ___________ for this ong[portion deleted - included in fully 
    licensed version]ted earlier.
 
Ongoing volumes are estimated at _______ tracks _______.
 
 
Terms and Conditions
 
The primary terms of our agreement require that you guarantee to have the rights to th[portion deleted - included in fully 
    licensed version]and we agree not to use the content for other purposes[portion deleted - included in fully 
    licensed version]equire a _______ deposit on all contracted work. The balance[portion deleted - included in fully 
    licensed version]ly against the past months work.
 
1. CONTROLLING TERMS. Pricing is valid until _________________ and are valid fo[portion deleted - included in fully 
    licensed version]ne year from the execution of this document. The terms and c[portion deleted - included in fully 
    licensed version]ntained herein shall apply to all provisions of encoding servi[portion deleted - included in fully 
    licensed version]ces by Company, Inc. ("Company") and to all purchase orders or other offers 
accepted by Company related thereto (collectively, the "Service"). These terms and conditions 
may in some instances conflict with or add to some of the terms and conditions af[portion deleted - included in fully 
    licensed version]rchase order or the procurement document issued by the Customer. In such case, 
the terms and conditions contained herein shall govern exclusi[portion deleted - included in fully 
    licensed version]S ORDER IS EXPRESSLY CONDITIONED UPON CUSTOMER'S ACCEPTANCE OF THE TERMS AND 
CONDITIONS CONTAINED HEREIN irrespective of whether the Customer accepts these conditions 
by oral or written acknowledgment, by implication or by accepta[portion deleted - included in fully 
    licensed version]provision of the Service ordered hereunder based on the content, materials and/or 
elements (collectively, the "Content") provided to Company by Customer.
 
2. TERMS OF PAYMENT. Payment must be made in US dollars and may be made in cash, cashier's 
check, money order, travelers checks, check drawn on local bank or Visa / MasterCard. 
All COD orders must be paid for and picked up Monday through Friday between t
[portion deleted - included in fully 
    licensed version]
3. PRICES; LIENS. Prices for the Service are those shown on the face of t[portion deleted - included in fully 
    licensed version], provided, however, that if such prices are based on the purchase of a minim[portion deleted - included in fully 
    licensed version]quantity of Service and Customer fails to purchase such minimum quantity, 
Company has the right to collect from Customer the difference between the price paid by 
Customer for the Service purchased and Company's standard price for such Service in q[portion deleted - included in fully 
    licensed version]actually purchased by Customer. Company shall have a lien and security interest 
on tapes, CDs, files and other property delivered by Customer to Company and/or made by 
Company therefrom for the balance of any account due us by the Custome[portion deleted - included in fully 
    licensed version]n and attorney's fees. Customer hereby authorizes Company to execute and file, 
on Customer's behalf, a financing or other statement evidencing this security interest. When necessary, Customer agrees to execute necessary documentation for perfecting s[portion deleted - included in fully 
    licensed version]ty interest.
 
4. SHIPPING. If Company provides shipping and handling services for Custo[portion deleted - included in fully 
    licensed version]urcharges will apply. Shipping and delivery dates are approximate. In no 
event, for any reason whether or not beyond Company's control, shall Company be liable to 
Customer or any other party for any losses, damages or liability for delay[portion deleted - included in fully 
    licensed version] shipped materials; nor shall any delay in delivery of shipped materials 
constitute grounds for cancellation of Customer's work order.
 
5. DELIVERY. The delivery dates set forth on this acknowledgment are
approximate only, and Company is not liable for any damages to Customer, nor shall Company be 
in breach of its obligations to the Customer, because of any delivery made [portion deleted - included in fully 
    licensed version]e time after the stated delivery date. Company may by written notice to Customer 
change any delivery date, and such date shall become the agreed upon delivery date unless 
Customer objects to such date in writing delivered to Company within t[portion deleted - included in fully 
    licensed version]ipt of Company's notice. Company shall not be liable for any late delivery 
caused by the failure of the Customer to provide in a timely manner any necessary information 
to affect such delivery.
 
6. FORCE MAJEURE. Company is not liable for any failure to deliver, or delay in t[portion deleted - included in fully 
    licensed version]of, any Service due to a cause beyond its control, including but not limited to 
acts of God, fires, typhoons, earthquakes, labor disputes, governmental actions or inability 
to obtain materials, components, energy, encoding facilities, or transporta[portion deleted - included in fully 
    licensed version]t of any such delay, the data of delivery or performance hereunder shall be 
extended by a period equal to the time lost by reason of such delay. If Company's production 
is curtailed for any of the above reasons, Company may allocate its[portion deleted - included in fully 
    licensed version]ous customers. Such allocation shall be in a commercially fair and reasonable 
manner.
 
7. STORAGE. It is the Customer's responsibility to arrange for removal of ma[portion deleted - included in fully 
    licensed version]y at the completion of each project. At the Customer's request, Company will 
store tapes and Content for a maximum of ______ days. Company reserv[portion deleted - included in fully 
    licensed version]tapes and/or Content to the Customer, freight collect, at the conclusion of the 
______ day period or to charge a storage fee or to otherwise dispose of the materials.
 
8. RIGHT TO REFUSE SERVICE. Company reserves the right to refuse service and/or[portion deleted - included in fully 
    licensed version]y Content which Company, in its sole discretion, deems unlawful, pornographic, 
degrading, likely to incite prejudice or passion or otherwise inappropriate.
 
    
9. CUSTOMER WARRANTIES. Customer represents and warrants that (a) Custo[portion deleted - included in fully 
    licensed version]ghts in the Content to use it in the manner contemplated by this acknowledgment, 
(b) the Content does not infringe upon or violate any patent, copyright, tr[portion deleted - included in fully 
    licensed version]rk or other intellectual property right of any third party or any obscenity law 
or other applicable law, rule or regulation in any jurisdiction in which the Content may be 
viewed or retrieved, (c) Company's provision of the Service and/or hosting of the Content 
hereunder will not infringe upon or violate any patent, co[portion deleted - included in fully 
    licensed version] or other intellectual property right of any third party, including but not 
limited to any and all performance license rights, mechanical license rights, synchronization 
license rights and rights under the Digital Performance Right in Sound Rec[portion deleted - included in fully 
    licensed version]or any obscenity law or other applicable law, rule or regulation in any 
jurisdiction in which the Content can be viewed or retrieved, and (d) the Content and Company's 
provision of the Service on behalf of Customer is not for any illegal, obscene, offensive or 
immoral purpose.
 
10. COMPANY LIMITED WARRANTY; LIMITED LIABILITY; EXCLUSION OF CONSEQUENTIAL DAMAGES. It [portion deleted - included in fully 
    licensed version]erstood and agreed that the Customer's
materials are transported, received, processed, used and stored at Cust[portion deleted - included in fully 
    licensed version]NY SHALL NOT BE LIABLE FOR ANY LOST PROFITS OR OTHER DAMAGES CAUSED BY THE LOSS, 
DAMAGE OR DESTRUCTION OF MATERIALS BELONGING TO THE CUSTOMER OR ANY OTHER PERSON WHILE IN 
TRANSIT OR POSSESSION OF COMPANY UNLESS CAUSED BY THE NEGLIGENCE OF COMPANY IN WHICH EVENT, 
THE LIABILITY OF COMPANY SHALL BE LIMITED TO THE REPLACEMENT OF A SIMILAR [portion deleted - included in fully 
    licensed version]APE OR MAGNETIC OR OPTICAL MEDIA TO THE MATERIALS WHICH WERE LOST, DAMAGED OR 
DESTROYED. EXCEPT FOR SUCH REPLACEMENT, COMPANY SHALL HAVE NO FURTHER LIABILITY REGARDING 
THE LOSS, DAMAGE OR DESTRUCTION OF SUCH MATERIALS. COMPANY SHALL NOT BE LIA[portion deleted - included in fully 
    licensed version]ANY OTHER PERSON FOR ANY ACT OR OMISSION OF ANY PERSON SELECTED BY COMPANY TO 
PERFORM SERVICES OR FURNISH MATERIALS TO CUSTOMER. IF MATERIALS FURNISHED BY COMPANY ARE 
FOUND TO BE DEFECTIVE IN MANUFACTURE, COMPANY SHALL REPLACE SUCH MATERIA[portion deleted - included in fully 
    licensed version]QUANTITY OF BLANK TAPE, OR MAGNETIC OR OPTICAL MEDIA, PROVIDED THE CUSTOMER 
NOTIFIES COMPANY IN WRITING WITHIN THIRTY DAYS AFTER SHIPMENT OF SUCH DEFECT. EXCEPT FOR 
SUCH REPLACEMENT, COMPANY SHALL HAVE NO FURTHER LIABILITY IN CONNECTION [portion deleted - included in fully 
    licensed version]MATERIALS. COMPANY MAKES NO WARRANTY, EXPRESSED OR IMPLIED WITH RESPECT TO 
THE MATERIALS OR SERVICES PROVIDED IT ASSUMES NO RESPONSIBILITY FO[portion deleted - included in fully 
    licensed version]Y OF MATERIALS OR SERVICES PROVIDED BY IT. COMPANY EXPRESSLY DISCLAIMS ALL 
WARRANTIES EXPRESSED OR IMPLIED, STATUTORY OR OTHERWISE, INCLUDING ANY IMPLIED WARRANTY 
OR MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. ALL WARRANTIES WITH RESPECT TO 
THE SERVICE ARE STRICTLY LIMITED TO THOSE SET FORTH IN THIS ACKNOW[portion deleted - included in fully 
    licensed version]ILL COMPANY BE LIABLE TO THE CUSTOMER FOR ANY CONSEQUENTIAL, INDIRECT, 
SPECIAL, OR INCIDENTAL DAMAGES EVEN IF COMPANY HAS BEEN ADVISED OF THE POSSIBILITY OF 
SUCH DAMAGES. NOTWITHSTANDING THE FOREGOING, COMPANY MAKES NO REPRESEN[portion deleted - included in fully 
    licensed version]TIES OF ANY TYPE WHATSOEVER REGARDING THE HOSTING OF ANY CONTENT ON 
ITS NETWORK OR ANY SUBCONTRACTOR'S OR OTHER PARTY'S NETWORK OR THE PERFORMANCE OR 
RELIABILITY OF ANY SUCH NETWORK, OR ANY CONNECTION TO, TRANSMISSION OVER, RESULTS OF OR 
USE OF ANY NETWORK CONNECTION OR FACILITIES PROVIDED (OR FAILED TO BE P[portion deleted - included in fully 
    licensed version]HIS ACKNOWLEDGMENT AND COMPANY MAKES NO WARRANTY WHATSOEVER FOR PRODUCTS 
OR SERVICES NOT ACTUALLY PRODUCED OR PROVIDED BY COMPANY.
 
11. INDEMNIFICATION BY CUSTOMER. Customer agrees to defend, protect, indemnify [portion deleted - included in fully 
    licensed version]mpany harmless from and against all claims of any kind, [portion deleted - included in fully 
    licensed version]n contract, in tort (including negligence or strict liability), or resulting 
from (a) services provided by Company on behalf of Customer hereunder, except for any 
damages arising exclusively out of any material breach of this acknowledgment by Company, (b) 
any use by Company of any data or files provided by Customer to Company under[portion deleted - included in fully 
    licensed version]ment, (c) any breach by Customer of this acknowledgment, including without 
limitation any failure by Customer to observe or satisfy any terms or conditions of this 
acknowledgment, (d) any violation of any applicable federal, state or loca[portion deleted - included in fully 
    licensed version] to the transmission and use of information and content, including laws related 
to privacy, publicity, the Communications Decency Act of 1996, arising out of the Customer 
Content, (e) any infringement of any United States or other patent, tr[portion deleted - included in fully 
    licensed version]de secret or other intellectual property right, including but not limited to any 
and all performance license rights, mechanical license rights, synchronization license rights 
and rights under the Digital Performance Right in Sound Recordings Act o[portion deleted - included in fully 
    licensed version]e Content supplied by Customer to Company or the Services provided hereunder, or 
(f) otherwise for any losses, expenses, damages and liabilities, direct, indirect, special or 
consequential which may arise out of Customer's use, distribution or [portion deleted - included in fully 
    licensed version] covered hereby except those caused solely by the sole gross negligence of Company.
 
12. ACKNOWLEDGMENT. Customer acknowledges that Company, in its sole discretion, may 
subcontract all or part of the hosting services to be provided hereunder. CUSTOMER 
FURTHER ACKNOWLEDGES THAT COMPANY WILL HAVE NO LIABILITY FOR THE FAILURE OF ANY NETWORK 
OR SERVER IN CONNECTION WITH THE HOSTING OF ANY CONTENT.
 
13. ORDER CANCELLATION. If an order for the Service is canceled, Customer must pay for 
orders scheduled for delivery or performance within ninety (90) days of Company's receipt 
of cancellation notice.
 
14. MISCELLANEOUS. Any waiver by Company of any default by the Customer hereunder shall not 
be deemed to be a continuing waiver of such default or a waiver of any other default or of 
any of the terms and conditions of this acknowledgment. The terms and conditions of this 
acknowledgment may not be superseded, modified, or amended ex[portion deleted - included in fully 
    licensed version]t it is a modification and signed by an authorized representative of each 
party hereto, provided, however, that Company may modify the specifications of the Service 
provided hereunder if the modification does not change the form, fit or function of the Service. This acknowledgment (not including any of the terms and conditions of the Customer's purchase order or any similar document issued by Customer), constitutes the entire agreement between the Customer and Company with regard to the Service listed on the face of this acknowledgment, and expressly supersedes and replaces any prior or contemporaneous agreements, written or oral, relating to such goods or services. This acknowledgment is governed by, construed and enforced in accordance with the laws of the State of _________________, without regard to conflict of laws provisions. Both parties agree that any litigation or arbitration between the parties shall take place in __________________ County, Washington, and both parties waive any objection to personal jurisdiction or venue in any forum located in that county. In any suit or action brought to enforce any term, condition or covenant of this acknowledgment or to recover damages arising from any breach of the acknowledgment, the losing party shall pay the prevailing party's reasonable attorneys' fees and all other costs and expenses which may be incurred by the prevailing party in any suit, action or in any reviews or appeals therefrom.
 
 
ACKNOWLEDGED AND AGREED: