Music Copyright License Agreement - Music Copyright Society of China and Hurray! Solutions Ltd.
MUSIC COPYRIGHT LICENSE AGREEMENT
This Music Copyright License Agreement (this "Agreement") is made on August 1,
2004 by and between the following parties:
Party A: Music Copyright Society of China (MCSC)
Address: 5/F, Jingfang Building, No. 33 Dong Dan San Tiao, Wangfujing, Beijing
Zip Code: 100005
Telephone: 010-65232656
Fax: 010-65232657
Party B: Hurray! Solutions Ltd.
Address: 3/F, China Resources Building, No. 8 Jianguomenbei Avenue, Dongcheng
District, Beijing
Zip Code: 100005
Telephone: 010-65188989
Fax: 01085191531
WHEREAS
WHEREAS, Party A is a non-profitable social organization officially
authorized to represent music copyright owners ("Copyright Owners") to exercise
their rights by way of collective administration of music copyright, and is
responsible for the collection of license fee from users of music works and
distribution of the same to Copyright Owners;
WHEREAS, Party B is a company providing ringtones music download service
through mobile telecommunications equipment and terminals. It now teams up with
a telecom operator (specifically referred to as "China Unicom") to provide
ringtones music download service through mobile telecommunications equipment and
terminals for subscribers of mobile telecom services in Mainland China
("Subscribers"), and intends to use any licensed musical works that are
administered by Party A ("Permitted Use") in the above service;
NOW, THEREFORE, Party A and Party B, through friendly negotiation,
hereby agree in respect of the license granted to Party B for the use of musical
works under Party A's administration in providing ringtones music download
service through mobile telecommunications equipment and terminals as follows:
Article 1 Definition and Interpretation
1. Musical products under Party A's administration shall mean:
(1) products of Party A's members;
(2) musical works administered by Party A for overseas organizations of
similar nature;
(3) musical works administered by Party A under the authorization of the
State.
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2. Use of musical works by Party B shall mean the use of the above musical
works by Party B in the provision of its ringtone music download service through
mobile telecommunication equipment and terminals to the Subscribers in Mainland
China via WAP business platform of China Unicom (including branches of China
Unicom throughout China) (website:http://dlfunmedla.coolyoung.com.cn:8080/web/).
3. Music Copyright shall mean the copyright exercised by Party A on behalf
of copyright owners in respect of their musical works.
4. Information of music content service shall mean a list of service
charges provided by a telecom operator (specifically referred to as "China
Unicom") to Party B with regard to the ringtones music download service through
mobile telecommunications equipment and terminals, including but without limited
to licensed songs, standard rate of charge for each use, number of times for use
of a single song as a percentage of the total number of times for use of all
songs, and related revenues.
Article 2 License
1. Licensed Content: Party A shall license Party B to use any music works
under its administration in the manners as required in Article 1 (2) hereof.
2. Licensed Songs: A total of 2,500 songs. After this Agreement becomes
effective, Party A shall license Party B to use 1,000 musical products named in
Attachment 1 hereto. In addition, Party B shall have the right to select
additional 1,500 musical products for use from the musical products administered
by Party A as licensed songs (hereinafter referred to as "Additional Songs")
from time to time according to market demand and the need of the Subscribers.
The parties hereto shall execute a supplemental agreement in writing to define
the scope of these Additional Songs. A list of licensed songs attached hereto as
an attachment shall be an integral part of this Agreement and shall take effect
after it is affixed with the across perforation seal of Party A.
3. License Restriction:
Unless the prior consent is obtained from Party A, the license granted
to Party B shall only be limited to the licensed contents hereunder and Party B
shall not sub-license or transfer the licensed contents to any third party.
Article 3 Warrant Clause
1. Party A warrants that:
(1) it has the right to license Party B to use any music products under
Party A's administration in the manners as provided in Article 1(2) hereof.
Party A shall be legally liable for any infringement of others' legitimate
interests in connection with the reasonable use by Party B of any musical
products administered by Party A hereunder.
(2) it will assist Party B in confirming the name of songs and the composers
of both lyrics and melodies recorded in a list of licensed songs after obtaining
the same from Party B. However, Party A shall not be liable for any false
information contained in the list with
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musical works licensed to Party B (which will be ultimately attached hereto as
an attachment) in connection thereof.
(3) it shall, upon payment by Party B of the licensed fees for music
copyright on time, distribute and pay to the copyright owners of musical works
promptly royalities in accordance with the list of service charges for ringtone
music download service through mobile telecommunications equipment and terminals
provided by Party B, which such list shall accurately record the name of songs,
their composers of lyrics and melodies, and other detailed data and information
available for the distribution of Party A. Party A shall be legally liable for
any consequences arising from or in connection with the failure of distribution
of license fees as scheduled or wrongful distribution due to the fault of Party
A. In the event of any serious legal consequences such as litigations
thereafter, Party B shall be entitled to terminate this Agreement.
2. Party B warrants that:
(1) it shall, within the time stipulated herein, provide Party A with a list
of songs which accurately records the name of songs, and the composers of both
lyrics and melodies. It shall, in every six months after this Agreement becomes
effective, also provide Party A with a list of service charges in connection
with its ringtone music download service through mobile telecommunications
equipment and terminals, stating the actual situation of Party B in the use of
licensed songs and other detailed data and information available for
distribution of Party A. Party B shall be legally liable for any consequences
arising from or in connection with any licenses wrongfully granted by Party A,
its failure of distribution as scheduled or wrongful distribution due to Party
B's inability to provide Party A with the lists of songs and service charges,
or, if provided, any incorrect and outdated information therein contained. In
the event of any serious legal consequences such as litigations thereafter,
Party A shall be entitled to terminate this Agreement.
(2) it shall pay royalty to Party A as required in Article 4 hereof. If
Party B, without giving a prior written notice to Party A and obtaining its
consent, fails to pay the royalty as scheduled for a period of not more than 30
days, it shall, in addition to the continuous performance of its obligations
hereunder, pay to Party A liquidated damages to be calculated at a rate of 0.01%
of the total outstanding royalty for each day overdue. If Party B, without
giving a prior written notice to Party A and obtaining its consent, fails to pay
the royalty as scheduled for a period of more than 30 days, Party A shall be
entitled to terminate this Agreement, and to request Party B to continuously
perform its obligation to pay the royalty and the liquidated damages which is
equivalent to 30% of the total outstanding royalty.
(3) it shall perform this Agreement in accordance with the provisions hereof
with regard to the form of use, payment method and term of use. In the event of
the use of any additional songs other than those listed in the attachment hereto
during the term of this Agreement, Party B shall in advance notify Party A in
writing of such songs and execute a supplemental agreement in respect thereof.
If Party B uses any songs other than those listed in the attachment, Party A
shall have the right to demand Party B to stop from doing so or even terminate
this Agreement, and to held Party B legally liable.
3. The parties hereto shall keep in strict confidence any material and
information involving themselves which is not known to any third parties if they
jointly convince that confidentiality is required. A party shall keep
confidential any non-public material and
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information which comes to its knowledge or is in its possession, or merely
involves the other party in connection with the execution or performance of this
Agreement. Without the written consent of the other party, no party shall make
disclosure of such materials and information to any third parties.
Article 4 Payment of Royalty
1. The parties hereto agree that Party B shall use 2,500 musical works
administered by Party A in the provision of its ringtone music download service
through mobile telecommunications equipment and terminals to the Subscribers in
Mainland China via WAP business platform of China Unicom (including branches of
China Unicom across China), and shall pay to Party A the royalty of music
copyright in respect thereof, totalling RMB 1 million.
2. The above royalty of music copyright shall be settled in three
instalments:
Party B shall pay to Party A the first instalment of royalty of RMB
40,000 upon execution of this Agreement.
Party B shall pay to Party A the second instalment of royalty of RMB
30,000 by November 30, 2004.
Party B shall pay to Party A the third instalment of royalty of RMB
30,000 by March 30, 2004.
Party A shall issue an invoice to Party B within 7 days upon payment of
each instalment.
3. The parties hereto agree that the payment of the above royalty of music
copyright shall in no way be affected by the operation of the ringtone music
download service through mobile telecommunications equipment and terminals
provided by Party B to the Subscribers in Mainland China. No refund shall be
made once royalty is paid.
4. Party B may pay the royalty to Party A by check or bank transfer, and
Party A shall then transfer the royalty to Copyright Owners of music works.
Party A's bank information is as follows:
Name of the Bank: ICBC Beijing, Dongsinan Office
Account Holder: Music Copyright Society of China
Account No: 0200001009014427289
Article 5 Royalty Audit
Party A shall have the right to conduct an audit by itself or its
authorized third parties in respect of the ringtone music download service
through mobile telecommunications equipment and terminals provided by Party B,
and Party B shall provide to Party A all necessary facilities in relation
thereto.
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Article 6 Term and Termination of This Agreement
1. This Agreement shall have a term of one year from July 1, 2004 to July
1, 2005. It shall terminate if the parties hereto have not confirmed the renewal
of this Agreement in writing prior to its expiration.
2. If it is found in the audit that Party B provides Party A with false
information and relevant revenues of its service and a remedy is made upon
receipt of the notice from Party A, it shall not only make up the royalty
payable to Party A, but also to pay liquidated damages in an amount equal to
double the make-up payment and shall bear any cost in connection with such
audit. If Party B declines to provide or provides false information and relevant
revenues and no remedy is actually made upon receipt of the notice from Party A,
Party A may terminate this Agreement at any time. Party B shall, in addition to
making up the royalty payable, pay to Party A liquidated damages in an amount
equal to double the make-up payment and shall bear any cost in connection with
such audit.
3. In the event that Party B willfully provides false information and
relevant revenues and this is confirmed by the investigation of Party A, Party A
may terminate this Agreement at any time. Party B shall, in addition to making
up the royalty payable, pay to Party A liquidated damages equal to third times
the make-up payment and shall bear any costs in connection with such audit.
4. A party may terminate this Agreement immediately by giving the
defaulting party a written notice if any circumstances described in the
terminating clauses hereof, and any other default and infringements occur and no
remedy is made within the reasonable time after the defaulting party receives a
notice from the non-defaulting party.
5. The early termination of this Agreement shall not affect any rights and
obligations of the parties under this Agreement prior to the early termination
hereof.
Article 7 Disputes Resolution and Governing Law
1. All disputes arising from or in connection with this Agreement or its
performance shall be resolved through friendly consultation between the parties
hereto. In the event that no agreement can be reached through consultation,
either party may bring a legal action to No. 2 Intermediate People's Court,
Beijing City.
2. The execution, performance and interpretation of this Agreement and
disputes resolution shall be governed by the laws of the People's Republic of
China.
Article 8 Miscellaneous
1. This Agreement shall have binding effect upon the respective successors
and assigns of the parties hereto.
2. Any article herein that is held to be fully or partly invalid or
unenforceable for any reason whatsoever, or in violation of any applicable laws,
shall be deleted, and the remaining articles of this Agreement shall continue to
have effect and binding upon the parties.
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3. This Agreement is executed in 2 original counterparts and each party
shall keep one copy. All of them shall have equal legal effect. The attachment
hereto shall be an integral part of this Agreement and shall have the same legal
effect as this Agreement.
4. During the performance of this Agreement, Party A and Party B may
execute a supplemental agreement in respect of any changes hereof, and the
supplemental agreement shall have the same legal effect as this Agreement.
5. After this Agreement becomes effective, any music copyright licence
agreement signed by the parties in relation to the ringtone music download
service through mobile telecommunications equipment and terminals provided by
Party B prior to this Agreement shall terminate automatically.
Party A: Music Copyright Society of China (MCSC)
By authorized representative: Seal of Music Copyright Society of China affixed
Date: August 1, 2004
Party B: Hurray! Solutions Ltd.
By authorized representative: Seal of Huarry ! Solutions Ltd.
Date: August 1, 2004